Author: Paul Ploumis23 Apr 2014 Last updated at 02:04:48 GMT
MUMBAI (Scrap Monster): While compare to March, India’s gold import is likely to decline in April and May as India has restricted money flow in order to raise curtain for the general elections. According to the officials, the government’s stringent restriction over money has knocked down the purchasing power of the customers.
Mr. Bachhraj Bamalwa, director with All India Gems and Jewellery Trade Federation (GJF) said that the demand for the gold is low because of the money flow restrictions by government. The precious metal’s import would fall to 20 tonnes in April and May whereas it was 50 tonnes in March.
Indian Election Commission strictly advised to party members should submit proof identity as an explanation for carrying more than 50,000 rupees ($830). This has become another blow to the jewelry business that has been suffering from 10 percent import duties by government for long time. The India’s election procedure started in on April 7 that would go on till May 12 and the results would be published on May 16.
Mr. Kumar Jain, vice-president with Mumbai Jewellers Association said that income tax department has opened a 24x7 call centre in order to check out the flow of the black money that the political parties used to bribe the voters for grabbing their votes.
The jewelers blamed customs officials that they couldn’t travel with huge legal money or bundles of legal gold because of the legal restrictions. Several cases have reported of nabbing of legal money and gold from jewelers. The jewelers also said that they have no enough stock of gold to provide the customers on the special occasions like Akshaya Thrithiya and Onam.
However, India is likely to reverse the restrictions on cash flow soon after the election. The country has been looking forward to lift the heavy import duties as the current account narrows.