It’s an important week for gold, both internationally and in the domestic markets. Amidst the Fed chaos, our very own budget got overshadowed.
Many suggestions have been made to the government, for the better of the Gems and Jewellery industry.
The government had increased the import duty on gold in order to narrow the trade deficit. But in the lead to do so, unknowingly it has also led to an increase in gold smuggling. The gems and jewellery sector has sought a reduction of gold import duty to 4 percent, cut and polished diamonds and cut and polished gemstones to 2.5 percent and relaxation of credit norms for working capital requirements in the forthcoming budget.
Furthermore, elimination of CTT tax has been proposed in order to curb dabba trading.
These and many other suggestions related to import duty, taxes, infrastructure, R&D and precious stones duty has been made to the government.
The stakeholders expect that the government will accept these or at least amend the current norms in favours of everyone.
The upcoming interim Budget will likely offer a fresh push to gold schemes, laying out plans to tweak existing ones and announce new products, as earlier efforts to draw people to park their idle holdings with banks yielded little. A comprehensive gold policy is being planned.
This is an election year so it (the government) will is expected to put in more money into hands of people. There will be a big amount of spending in a short span that would be good for gold. Before the election, Prime Minister Narendra Modi’s government could announces measures to help the nation’s farmers, the biggest buyers of gold.
Keeping the bigger picture in mind, many new suggestions have been made, such that it creates a win win situation for the government, the jewellery industry and the end consumer.