INDIAN JEWELLER (IJ) Dec - Jan 2020

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The Big STory Industry nods to compulsory hallmarking; expects more time to sell old stock In November last year, Union Minister for Consumer Affairs, Food and Public Distribution Ram Vilas Paswan said that of hallmarking of gold jewellery and artefacts will be made mandatory across the country from January 15, 2021 to ensure purity of the precious metal. The decision will come into effect after a year, making it compulsory for all the jewellers to register with the Bureau of Indian Standards (BIS) and sell only hallmarked gold jewellery and artefacts. Gold hallmarking is a purity certification of the precious metal and is voluntary in nature at present. The BIS is already running a hallmarking scheme for gold jewellery since April 2000 and around 40 per cent of gold jewellery is being hallmarked currently. Jewellers and retailers will be given one year time to exhaust their existing stocks. The decision was taken in light of protecting consumers’ interest, mainly in small cities and villages to ensure that they purchase pure gold jewellery. “We welcome compulsory hallmarking but our only request is to give us more time. Right now they have given us 12 months, but we would require 18-24 months, so that every jeweller is able to dispose off his non-hallmarked jewellery. It will take close to 2 years to replenish old stock with hallmarked pieces. Along with hallmarking for 14, 18 and 22, it should be made compulsory for 20, 23 and 24 as well. We also have to have a dialogue with the ministry of consumer affairs as to how it will be implemented as there are not too many hallmarking centres in the country yet,” adds Padmanabhan. The Bureau of Indian Standards (BIS) has formulated standards for hallmarking gold jewellery in three grades -- 14 carat, 18 carat and 22 carat. The minister also informed that government may make it mandatory for retailers to display prices of these three quality grades at their shops. At present, there are 877 assaying and hallmarking centres in 234 district locations and 26,019 jewellers have taken BIS registration. However, the government targets to open more hallmarking centres in all districts of the country and register all jewellers during this one year window. “Mandatory hallmarking will affect small players in a big way because they are not quality conscious. In any of the big shows, there is still a huge demand for gold jewellery which is not 22 kt as is. There are people who sell jewellery with 80 per cent purity saying that it is only 80 per cent pure, and there are people who sell 22 kt gold but with a melting purity of 80 per cent. Though there is full disclosure, one thing is clear – you can’t fool people anymore ,” adds Shekhar. Consumer awareness as far as hallmarked gold is concerned is still very low, especially in rural areas. There are around 200,000 jewellers in this country and approximately only around 26,000 jewellers are registered with BIS. Making hallmarking compulsory is set to give way to more consumer awareness and also decrease the extent of fraudulent practices wherein jewellers are selling less carat jewellery in the pretext of them being hallmarked. “We have been selling hallmarked jewellery for so many years. Making it compulsory only has positive outcomes,” adds Jagwani. Mandatory hallmarking will affect small players in a big way because they are not quality conscious. In any of the big shows, there is still a huge demand for gold jewellery which is not 22 kt as is. There are people who sell jewellery with 80 per cent purity saying that it is only 80 per cent pure, and there are people who sell 22 kt gold but with a melting purity of 80 per cent. Though there is full disclosure, one thing is clear – you can’t fool people anymore Himanshu Shekar, Manoharlal Jewellers 70 | december 19-january 2020 | INDIAN JEWELLER
Job cuts rampant; artisans to further lose jobs The increase in import duty has led to many problems in the industry. As people have been embracing a wait and watch approach to buy jewellery, jewellers are looking at cutting down their workforce. The reduction in demand for gold jewellery has led many jewellers to lay off karigars as they are unable to pay them. Almost 1 crore workers are employed by jewellery manufacturers. Owing to the ongoing issues, many manufacturing units are closing down. Almost 10 per cent of the workforce has already left the industry in search of other livelihoods and this is not a number that is negligible. “The small exporters are not interested in all the paper work involved when it comes to exporting and because of that their businesses are affected and hence they are not able to maintain their workforce,” says Sabysachi Ray, Executive Director, GJEPC. Close to 1.5 lakh workers who handcraft gold jewellery left to their native places from Gujarat right before festive and wedding season. Increase in duty coupled with high gold prices and weak rupee has led to this recession – the approach is quite simple, where 6 workers are required, 3 are retained instead and those who are retained don’t have enough work. The jewellery industry is going through a dilemma – whether to retain their workers or to sustain themselves. Without government’s inclination to help with the policies and unless the gold price stabilizes, the industry will witness more job losses. Liquidity remains an Issue The industry has been facing a large liquidity crisis as banks have not been forthcoming in lending loans to jewellers. Banks are not exposing themselves to small and medium scale companies due to insufficient collateral for working capital loans. The lack of funds has really pushed many small and midscale players in a bottleneck situation, as they are not able to operate in an efficient way. “The industry is perfect. It is only 2-3 per cent of players who defaulted that too not in the gold jewellery industry but the diamond industry. Most players are hardworking and disciplined, they pay their taxes, yet we are punished for our honesty by the banks. Even though the finance ministry has been asking banks to lend money to this industry, banks have completely ignored the gems and jewellery industry. A few jewellers have gone bankrupt, some have declared insolvency and some have committed frauds – there have been some defects in their audits. We are willing to sit with the banks and discuss how we can streamline the process, but they are not ready to hear us out,” adds Padmanabhan. INDIAN JEWELLER | december 19-january 2020 | 71
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Page 79 and 80: Stephen Hawking famously said that
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INDIAN JEWELLER (IJ) Dec - Jan 2020

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