18 Jun 2019
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Budget, No Respite
Diamond, Jewellery Sectors Unhappy with Union Budget
By: Diamond World News Service
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Aug 14 2014 6:09PM
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Reference: 9438  

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The past couple of years were extremely daunting for the gems and jewellery industry. With the Modi Sarkar taking over office, the industry pinned its hope from the new Government. The first of the move that was highly anticipated was the relaxation of import duty on gold and abolishment of the 80:20 rule in the Union Budget, but the expectations were far from met. A report by M.D. Dewani.

The final Union Budget for 2014-15, presented by Finance Minister Arun Jaitley on 10 July 2014 has left the diamond industry and trade as also most segments of gems and jewellery, virtually disappointed as no worthwhile attempt has been made by it, to relieve these export-oriented sectors from the problems they have been facing for sometime now.

Sagging Exports:
The Government could not be unaware that overall exports of all items of gems and jewellery in 2013-14 were down by 12.24 per cent in dollar terms, compared with the preceding year, while shipments of gold jewellery during the period plummeted by 39.50 per cent in dollar terms. Besides, shipments in the first quarter of 2014-15 were also slack. This implied that some special measures were needed to place these exports on even keel. Also representations were made to the government in this regard by these sectors pleading for urgent measures to boost these exports.

Inadequate Measures:
No doubt, the Union Budget announced some measures pertaining to the gems and jewellery business, but the leaders of this sector doubted whether these would be enough to give adequate boost to this sagging sector.

Import Duty on Diamonds:
So far as the diamond sector is concerned, the Union Budget raised the import duty on cut and polished diamonds to 2.5 per cent from 2.00 per cent, but some manufacturers were of the view that there was no need to promote import of cut and polished diamonds into the country by keeping the level of import duty on them at such a low level. However, some circles, which were interested in importing cut and polished diamonds, argued that the import duty on such diamonds would have been kept unchanged. One good step taken by the budget was the imposition of duty on imports of broken diamonds into the country. When the country claimed to be the biggest manufacturer of cut and polished diamonds in the world, no facility given for the import of cut and polished diamonds - whether broken or otherwise could be justified, according to some diamantaires.

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