Feb 01, 2018

GJEPC Welcomes Budget’s Overall Orientation, Mixed Response to G&J Industry-Related Measures

The Gem & Jewellery Export Promotion Council has welcomed the overall thrust of the Budget that was presented by the government today, stating that it was “development oriented” and “will spur the India consumption story and create more employment opportunities”.

However, the GJEPC said that it was awaiting clarity on the specific roadmap for achieving the target of 15% growth in exports, as mentioned by the Union Finance Minister in his speech. 

GJEPC Chairman Pramod Agarwal also welcomed the government’s initiative to formulate a comprehensive Gold Policy to develop gold as an asset class, saying that this will ensure a new era of development for the gold market and exports in the sector. He also said it was good that the Government was planning to establish a “consumer friendly and trade efficient system of regulated gold exchanges in the country”, while reiterating that the Council would “continue to seek a reduction in basic import duty on gold, silver and precious metals and hope that it will be considered as part of the Gold Policy announcement”.

Expressing disappointment over the increase in customs related duty on cut and polished diamonds and cut and polished coloured gemstones from 2.5% to 5%, he said that this move would hamper “India’s chances of becoming an international diamond trading hub” as it “doesn’t provide India a level playing field vis-à-vis other peers such as Belgium, Dubai and Israel”. Agarwal added that the duty would “also have a negative impact on the Shut Out business from the US, which has been a fast growing segment”.

The Council also welcomed the proposal to cut corporate tax of companies with annual turnover of upto Rs. 250 crore to 25% as this will result in more investments and job creation. It, however, urged the government to extend this benefit to cover all gems & jewellery exporters.

Similarly, it said that various “schemes and the increased outlay for MSMEs as well as the initiative to create a database and identity for MSMEs” and “the move to incentivise domestic value addition and Make in India in the gems & jewellery sector in addition to others” were positive measures, but requested that the benefits extended to leather, textile and footwear businesses should be extended to the gems & jewellery sector, which was also a job-intensive industry.

Also welcomed were the move to contribute 12% to Employee Provident Fund (EPF) in wages of new employment for three years in all sectors and the emphasis on education and skill enhancement. In the case of the latter, Council said it “should be extended to creating more institutes for the gems and jewellery sector”. The Council also noted the announcement that the Department of Commerce would be developing a National Logistics Portal as a single window online market place to link all stakeholders.

Finally, the Chairman urged the government to create more jewellery parks with shared support services and resources, in sync with the government’s emphasis on manufacturing and creating infrastructure to stimulate job creation, as mentioned in the Economic Survey.

Other trade bodies in the sector also had mixed responses to the Budget. Nitin Khandelwal, Chairman, All India Gems and Jewellery Trade Federation (GJF) described the revamping of the gold monetisation scheme as “a victorious decision for the gems and jewellery sector” and expressed the confidence that the government would accept the industry recommendation to cut import duty on gold, sooner or later.

He also said that the excellent reforms aimedat the agriculture and rural sector, which is one of the highest contributors to the GDP of our country, “will empower rural consumers through improved earnings” and “in turn help the jewellery sales in rural sector”.

Saurabh Gadgil- Chairman & Managing Director, P.N.Gadgil Jewellers and National Vice President, Indian Bullion and Jewellers Association, said that the “budget has given a clear indication that the ministry feels it is time to clean and organise the gems and jewellery industry by introducing the best practices”.