A meeting recently took place between Mr. Vasant Mehta, Chairman of the Gem & Jewellery Export Promotion Council and Honorable Indian Finance Minister, Shri Pranab Mukherjee, amidst representatives of the Indian gem and jewellery industry, in which, the industry expressed grievances and expectations of relief from the Union Budget’09. Mr. Mehta outlined a plan highlighting critical challenges faced by the Indian gem and jewellery industry today, - threat of competition from fast growing China; worldwide fall in demand; increasing unemployment of its highly skilled and world-class workforce; and volatility of Gold prices - and ways to correct them. %% Intervention of the government was sought in – increasing dollar liquidity through foreign exchange reserves of the country, to suffice the projected need of at least $3-4b in the coming year; domestic funding at internationally competitive rates (LIBOR based) as opposed to the high interest rates currently being charged by Banks, facilitated with an interest subvention of 2 percent; the interest subvention of 2 percent on Rupee finance to be extended for Dollar finance also; citing peculiar nature of the Industry, characterised by daily price fluctuations, as a major cause for taxation dispute, a levy of a flat 1 percent Turnover Tax in place of all forms of current direct taxes, thereby eliminating arbitrariness, confusion and delays in finalisation of tax returns. Owing to recessionary pressures, income on export earnings should be made tax-free for the next two years. %% Also, the plan suggested, export credit limits sanctioned by the banks as on 01 April 2008 to exporters of the Gem & Jewellery Industry, to continue until 31 March 2011; lack of availability of duty free gold in many parts of the country is a constraint for small exporters while procuring primary raw material and to be competitive in the International markets – for which the industry seeks introduction of a duty draw back scheme for Gold Jewelry exports. %% Mr. Vasant Mehta said, “The recession has not only debilitated the Industry from inside, but has also led it to the precipice of non-competitiveness and loss of market share. The implementation of these measures will enable us to bounce back and re-establish our pre-eminence in the International markets and also ensure the long-term growth of the Industry. We are hopeful of a positive response to our recommendations and look forward to seeing these reflected in the coming budget.” The GJEPC’s proposal aims to uphold the repute of the gem and jewellery industry in India’s economy and the world gem and jewellery industry. India is the world’s largest manufacturing centre for gems and jewellery, and the Indian gem and jewellery industry contributes over 12 percent to the total export earnings of the country. %% Mr. Mehta also met with Honorable Minister of Commerce & Industry, Shri Anand Sharma, in which, he tabled some relief measures for the Industry. These include reduction in import duty on machinery from 10 percent to 5percent; reduction in import duty on Plain Gold Jewellery below 22k form 10 percent to 5 percent; removal of import duty on Rhodium and Rough Coral; and Reduction in import duty on Precious Metal Scrap from Rs. 257.50 per 10 gram to Rs. 100 per 10 grams. %% The GJEPC has proposed the setting up of a long-term welfare fund jointly with the Government, with the aim of providing over 3-4 lakh workers who were forced to be jobless in the economic slowdown, with employment guarantees, training and other benefits.