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Industry Reaction - Budget 2008
Budget 2008 Reactions on policies pertaining to the Gems and Jewellery Sector
Mr Mehul Choksi - Chairman, Gitanjali Group
We welcome the FM''s decision to reduce duty on zircons and corals, which would generate several employment opportunities in India. It would further facilitate easier imports of roughs to India, leveraging traders in the country.
The market size estimated at around INR 2000 cr. as of today, would experience a significant momentum with the reduction of duties by 5%, however, the reduction the case of corals would provide not a comparable boost, since the volumes of its consumption in jewellery is limited.
The relief to the employed class of India for a limit of Rs. 1.5 lacs per annum, which is relatively higher corresponding to the limits till the last FY, we expect consumerism to cascade upwards. This coupled up with the rising GDP which is recorded at 8.7 % this year and the increase in per capita income that is on an average doubled over the last decade would accelerate the purchasing power of the consumers benefiting all businesses in the country.
A consistent policy has been observed over the SEZ projects with no major tax effects on the segment is an encouraging move. These ventures can certainly be regarded as active entrants in the economic activities of our trade. Several SEZ projects are on the roll, some of which have just seen the conclusion of their first phase; hence constancy in policy was definitely required. Engagements in more of such projects and funding for the same would take the industry to newer highs.
We were expecting reduction in excise duties on branded jewellery, since this industry is still in its development stage and merchants at all levels need to be encouraged towards branding enhancing India''s image on a global level - this issue was not addressed, this year.
Overall, I would regard the budget as beneficiary and fair except the branded jewellery segment where further rationalization on excise duties could have been considered.It can be safely said that since consumerism is on a fast track, the mass-jewellery segment would record unmitigated success. We believe, that 2008 bring good tidings for the traders and take the industry to unprecedented levels of success. A boost to the traders and increase in employment opportunities would further strengthen the position of India as an emerging market for foreign investors and help us attain a status of being an important ''Trading Hub'' in the global map.
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