It's day 20 of the jewellers and bullion traders' strike and there are no signs of roll back from the government. The industry is also determined, and has called for an indefinite strike.
The strike was called to protest the proposed increase in import duty to 4 per cent from 2 per cent on gold and the imposition of 1 per cent excise duty on unbranded jewellery.
"The government must understand that it's not the price hike that is bothering us so much. It is actually the paper work that will increase with the imposition of excise duty. This is what will really affect the industry. About 90 per cent of jewellers in India are not equipped to work under the new policy, if passed, says Rajiv Jain, chairman, GJEPC.
In fact the industry is afraid that this will give rise to the good old days of smuggling and 'Inspector-Raj'. Agrees Ajit Jain, a Mumbai-based proprietor, "There are a number of elements that go into making jewellery, and it's difficult to keep tab of every little detail. It's just impossible to produce bill for every small transaction, and is certainly not viable. Thus, it will be nice if the government can keep one fixed percentage point as it is done globally. This way we won't be answerable to different
Even though the strike is at the retailer level, manufacturers also feel that eventually they will be affected by this paper work, as they will have to employ more people just to understand and handle the new duties.
The newly-introduced import duty has made gold dearer up to Rs 12,000 per 100 gram and Rs1.20 lakh per kg. Though paper work is the main concern, price hike is also a point of consideration.
"Rise in gold import duty will put an additional burden on the consumers. This means that either jewellers will have to cut costs by trading the wrong way, so as to keep their prices competitive or bear less sales as they will have to sell gold at a higher price in order to sustain. All in all, the entire proposal will only push people to indulge into unfair trade practices. Many like us are not willing to do so," said a jeweller on request of anonymity.
It certainly is bad news for the traders. The national loss is estimated to be over Rs 11,000 crore (Rs 110 billion). "We have lost huge amount of business in the last 14 days. On an average we would take 10 orders per day. But, there has been no trade, and worker/karigars who are also bearing the loss are already considering moving back to their villages," says Ajit Jain.
However, the branded jewllery stores remain open. But, whether the strike has affected their business or not is too soon to say.
