-- Posted Sunday, 25 August 2013 | | Disqus
The bullion industry has given us everything. This industry is bleeding after the Indian government has put curbs on gold imports. The Newton law of motion that “every action has an equal and opposite reaction” has resulted in reduced gold imports into India and unorganized workers working in the gold jewellery manufacturing sector on the verge of layoffs. The objective here is to open the eyes of the readers and also give back to this sector when they have given us everything.
The current position of jewellery workers and craftsman in India
· There are no official estimates on the number of people employed (directly, indirectly, employed to self employed) in the jewellery sector
· Unofficial estimates put the numbers of people employed (directly, indirectly, employed or self employed) in the jewellery sector as 1 crore of which 50 lakhs to 60 lakhs workers are from the state of Bengal originally from Bengal and living as artisan/craftsman all over India.
· “Over 50% of the workforce (approximately a million workers) could lose their jobs if the government’s decision to discourage import continues,” said Ashok Minawala of the All India Gems and Jewellery Trade Federation.
· According to the industry body, over 20 lakh goldsmiths engaged with the manufacturing units are sitting idle, though they are still employed on paper. These goldsmiths used to earn around Rs. 20,000 per month
· The government of India does not have any data compiled of the number of workers making a living in the gems and jewellery sector.
· “Industry status” has not been given to this sector.
· Hindustantimes report link: http://www.hindustantimes.com/business-news/Markets/500-000-workers-lose-jobs-as-jewellers-curb-gold-imports/Article1-1102555.aspx
· Lack of raw material (gold) will result in more and more joblessness in this sector.
Our view
· Gold as an investment demand needs to be stopped. But gold jewellery should not be stopped and gold should be made available to jewellers. The government has to stop people from buying gold bars or plain physical gold. Gold jewellery buying should never be discouraged.
· It is very easy for the government to compile the number of workers working in the gems and jewellery sector. In Delhi there are regular updates of the voters list which includes changes in one profession. The government only needs to add a new classification for jewellery sector workers which will enable to get this information at a quicker time and with a reasonable cost
· A fund should be created where the government and the various bullion association or gems and jewellery sector association contribute and the proceeds should be used to rehabilitate the artisans and craftsman in need.
· Retraining to alternate professions (wherever possible) so that they can get an employed elsewhere.
· Preservation of certain forms of craftsmanship which are a part of ancient history of India. We should not let them vanish into history.
There is an economic time article (Link http://articles.economictimes.indiatimes.com/2013-08-15/news/41413642_1_gold-jewellery-bachhraj-bamalwa-gold-imports) which says that gold jewellery imports from Italy, Thailand, Turkey, Dubai and other nations could increase as a result of government policy to reduce gold imports. The duty on jewellery is now only 2.5% higher than the raw metal. With a local premium on gold prices and other restrictions such as export obligations for importing gold, shipping in foreign jewellery is not only more convenient but also works out slightly cheaper, traders and jewellers said. The simple question is that there will still be foreign exchange outflow even when gold jewellery is imported. Then why this double standard?
According to Mr.Bachraj Bawalwa of “Nemi chand bamalwa & Sons” Kolkatta, at the moment not much harm is done on people working in the gold manufacturing jewellery, but in case physical gold is not available adequately before the gold buying season starts in early October then a large numbers of these workers will be out of job.
Large and branded jewellers will not be affected in a big way as they have exports and also sell diamond jewellery and other non gold forms of jewellery. However most of the gold jewellery sales in India are from the very small local manufacturers which are centuries gold and they have the maximum risk of a closure. The government attitude towards this sector is just callous and nothing else.
More updates will be there soon.
Disclaimer: Any opinions as to the commentary, market information, and future direction of prices of specific currencies, metals and commodities reflect the views of the individual analyst, In no event shall Insignia Consultants or its employees have any liability for any losses incurred in connection with any decision made, action or inaction taken by any party in reliance upon the information provided in this material; or in any delays, inaccuracies, errors in, or omissions of Information. Nothing in this article is, or should be construed as, investment advice. Prepared by Chintan Karnani.
-- Posted Sunday, 25 August 2013 | Digg This Article
| Source: GoldSeek.com
