Jewellery stores remained closed during key festivals such as Gudi Padwa and Akshaya Tritiya in the first half of the year.
The All India Gem and Jewellery Domestic Council (GJC), which represents the retail jewellery sector in India, has written to the Union Finance Minister Nirmala Sitharaman and the Reserve Bank of India (RBI) seeking immediate financial assistance and banking-related relief for the stressed gem, jewellery and allied businesses post the devastating second wave of the global Covid-19 pandemic.
GJC noted that the gem and jewellery sector was deemed a stressed industry by the K.V. Kamath-chaired Expert Committee constituted by RBI on 7th August, 2020.
GJC has sought an extension of the moratorium on interest payments for the stressed gem and jewellery sector for a period of six months, as several jewellers affected by multiple lockdowns were finding it difficult to repay loans.
GJC has urged the Finance Minister and RBI to extend certain measures – Resolution Framework 2 and Resolution for MSMEs – to alleviate uncertainties and stress on the jewellery business, comprising mostly micro, small & medium enterprises (MSMEs).
GJC is seeking Government assistance to restructure loans given to the gem and jewellery businesses by offering a one-time subsidy. It is also requesting an increase in the tenure of Gold Metal Loans (GML) from 180 days to 270 (as was done during the last year 2020) or 360 days.
GJC warned of potential job losses among unskilled and poor goldsmiths. It said the industry is burdened by huge inventory costs, higher fixed overheads including interest costs and rentals, among others.
Ashish Pethe, Chairman, GJC, said, “For almost two months of 2021, the domestic gems and jewellery industry and their stores were shut even while key festivals such as Gudi Padwa and Akshaya Tritiya were celebrated in lockdown for the second year in a row. The government allowed weddings during lockdowns, but jewellery businesses do not fall under the ‘essential’ category. “Even after the slow opening of the states, the next few months will be difficult and challenging for the industry, which offers livelihood to lakhs of people and their families. We request the Government to consider our plea of offering financial aid, assistance and relief as has been given to several small businesses and MSMEs in other sectors. We also seek that the benefits that were given in 2020 should be extended even in 2021.”