India’s jewellery sector disappointed by budget

New Delhi : India’s jewellery industry Thursday gave thumbs down to the budget presented by union Finance Minister P. Chidambaram, saying it was a “non-event” for the sector.

“This budget turned out to be a non-event for us,” Gems and Jewellery Export Promotion Council’s eastern region chairman Pankaj Parekh told IANS, saying none of the recommendations of the task group to make India as an international diamond trading hub was announced by Chidambaram.

The group was constituted under chairmanship of the director general of foreign trade (DGFT) and had five other members.

“The task group recommended the Reserve Bank of India (RBI) to form a kitty of $3 billion to $5 billion to help the country’s jewellery makers procure rough diamonds from abroad to compete with China. But it was not announced,” he said.

Other recommendations such as reducing gold import duty to thwart smuggling and measures to reduce transaction cost were also not accepted, he noted.

Earlier, the central government hiked import duty on gold to 6 percent from 4 percent.

Parekh, however, welcomed the finance minister’s announcement of taking a few measures to encourage people to make productive investments in financial markets instead of just putting money in gold and levying a commodity transaction tax (CTT) on non-agriculture commodity trades at 0.01 percent on the price of the trade.

“These measures will reduce speculative demands for gold. Consumption demand for the yellow metal will, however, remain unaffected,” he said.

Seconding Parekh, Mumbai-based jewellery retailer TBZ Group’s head-retail business Divyesh Shah said: “There is nothing positive or negative for the jewellers in this budget. No change in excise duty, no change in import duty…things remain the same.”

Shah was, however, hopeful that the finance minister would consider the recommendations of the task group later. “I don’t think that he has rejected the proposals.”