15 Apr 2014 MUMBAI (Scrap Monster) : The election process has negatively impacted gold trade in the country. Gold traders in India are used to cash transactions while buying and selling gold. With election code of conduct coming into force, traders face severe restrictions on carrying physical cash in large denominations. According to Hasmukh Bafna, President, Gold Chains & Jewellery Welfare Association, business has dropped by nearly 70-80% since first week of March this year.
With the election code of conduct in place, the Election Commission has implemented various regulatory steps to combat black money and illegal money power. Surveillance squads are being deployed across the country to intercept any suspicious transportation of cash.
According to the Association, traders carrying cash in excess of Rs 50,000 are being taken into custody and harassed for hours. This has adversely affected trade transactions as not all gold importers accept cheques or demand drafts.
Customers too are cautious of carrying cash for gold purchases. The jewellers in India have not benefited from the sharp fall in gold and silver prices as customers fear to carry cash to purchase gold.Any cash beyond Rs.50,000 could be subjected to scrutiny.
Several jewellers are reported to have stopped business till the elections are over. They anticipate the low gold demand to continue till mid-May- the time when election process comes to an end in the country.