Gold & Silver

Gold demand to drop 30% this year

Our Bureau Mumbai | Updated on April 09, 2020

Demand for gold in India is expected to drop 30 per cent to 483 tonnes this year on the back of volatile prices and complete lockdown in the country, leading to job losses, which in turn is denting the purchasing power of consumers. The Indian gems and jewellery industry is predominantly wedding-driven. But this year, due to the coronavirus pandemic, these events are being postponed. Wedding shopping has come to a halt in the ongoing peak wedding season.

Gold demand was earlier estimated at 700-800 tonnes in 2020. However, now purchases are estimated to plummet 30 per cent to 483 tonnes from 690 tonnes logged last year.

The gems and jewellery industry has taken a severe beating but the most affected are the daily wage workers, as they have been rendered jobless due to the shutdown, said Rajeev Singh, Director General, Indian Chamber of Commerce.

Moreover, the sector has a lot of compliance issues like advance tax payment, maturity date of Gold Metal Loan, and interest payment on Gold Metal Loan, he said.

ICC has suggested extension of at least 180 days for Advance Tax payment and roll-over of Gold Metal Loans at lower interest rates. It has appealed to the government to allow a 50 per cent reduction in interest rates for term loans and double the working capital facilities for 180 days in support of all businesses.

ICC has also requested the government to create a special fund and distribute one-time funding to the craftsmen and artisans who are without jobs and who have registered their details through Pahchan Cards, it said.

The government should extend Employees’ Provident Fund for six months instead of three months as a breather to the industry, and also extend this support to all companies without capping the upper limit on employee numbers, ICC said.

Published on April 09, 2020

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