Welcoming the Budget, the gems and jewellery industry today said positive focus on the rural economy and estimated growth of GDP to 7.2-7.5 per cent will boost demand.
However, they were disappointed that there was no announcement in reduction of import duty on bullion. "The government has made excellent reforms for agriculture and rural sector, which is one of the highest contributors to the GDP. These reforms will empower the rural consumer through improved earnings. This will in turn help the jewellery sales in rural sector," All India Gems and Jewellery Trade Federation (GJF) Chairman Nitin Khandelwal said.
He added that the proposed comprehensive Gold Policy, Gold Spot Exchange and Gold Deposit Account will also be very beneficial for the industry. Finance minister Arun Jaitley announced that the government will revamp the 'Gold Monetisation Scheme' and come out with a comprehensive policy on the precious metal. The revamping of the scheme is aimed at enabling people to open a hassle-free gold deposit account, Jaitley added.
GJF former chairman Sreedhar GV said, it is a welcome budget for the entire gems and jewellery sector. "The establishment of a regulated gold exchanges is exceptionally positive towards making gold a mainstream national value-added asset. A stable policy environment and a fair and effective trading market will bring much needed transparency and stability," he added.
Gem and Jewellery Export Promotion Council (GJEPC) Chairman Pramod Agarwal said the proposal to cut corporate tax of companies with annual revenues of up to Rs 250 crore to 25 per cent will benefit the sector but this measure should be also made applicable to all gems and jewellery exporters. The cut in corporate tax will result in more investments and job creation, he added. However, he said, the increase in customs duty of cut and polished coloured gemstones (including diamonds) from 2.5 per cent to 5 per cent will hamper India's chances of becoming an international diamond trading hub. "This move doesn't provide India a level playing field vis-a-vis other peers such as Belgium, Dubai and Israel. It will also have a negative impact on market share in US business US, which has been growing fast," he added.
Meanwhile, Indian Bullion and Jewellers Association Vice President Saurabh Gadgil said, "We are hoping this budget will bring about the required confidence in the economy and benefit the industry in the long run," he added. Kalyan Jewellers chairman and managing director TS Kalyanaraman while applauding the rural focus, said the issue of import duty on gold has not been addressed, which we hope will give a fillip to the domestic industry," he added.