Interim budget fails to give high boost to India's G&J industry

India's interim budget 2009-10 announced by Minister for External Affairs Pranab Mukherjee, showed some light in view of the economic slump affecting export earnings. The government announced a 2 percent interest subvention, which will be extended beyond March 31 till September 30, 2009. This subvention was not quite the answer to the woes of the Indian gem and jewellery industry. As quoted in the media, Mr. Vasant Mehta - Chairman of Gem and Jewellery Export Promotion Council(GJEPC) mentioned that the budget did not pay attention to the needs of the sector. According to him, the industry was looking forward to some support for some schemes to retain the workforce, as the sector has been facing issues of huge numbers of job losses.

According to him, the shipment loan interest subsidy extended until September 30, presented a very short term, instead the industry was hopeful it would atleast extend for the entire fiscal year.

The subsidy by the government applies to interest on pre- and post-shipment credit for employment-oriented sectors like textiles, carpets, leather, gems and jewellery, marine products and such small and medium enterprises. The government will have to face a financial liability of around Rs.500 crore for this subsidy, during the financial year 2009-10. According to Mr. Mukherjee, export growth has dipped during the period of the first nine months of the current year, to 17.1 percent, from the average 26.4 percent growth rate observed over the previous four years.