Jewellers across the country were on strike since March 02, when Finance Minister Arun Jaitley announced that gold would be liable for one per cent excise duty from this financial year. When the United Progressive Alliance (UPA II) tried to impose a similar excise in 2012, gold associations across India went on a strike for 21 days before the government withdrew the proposal. While the Bharatiya Janta Party (BJP) supported that strike then, more than a month into this one, there are no signs of the government bending. To prevent Indians from buying gold considering the same as “dead asset”, the government raised import duty on gold to 10% in phases over two years ago. Still consumers’ appetite over gold remained unabated with the import of gold continued at around 1000 tonnes through both official and smuggling. Jewellers had gone on strike against the meagre one per cent excise duty imposed by the finance minister in the recent budget. The strike which was in its second month has reportedly impacted Rs. 1 lakh crore of business in the sector. The strike has also impacted gold imports which have fallen to a 29 month low of 12 to 15 tonnes. Around 70-80 per cent of jewellers had gone on strike as the gold import bill is estimated in the range of only $600-700 million.
The strike had rippled through the lives of the several thousand artisans engaged in the gold trade. Abrupt departure from the industry in bad taste would impact jewellery sector badly in the long term. Not only jewellery shop owners spend thousands of rupees on their training in a professional institute and retain them as loyal employees throughout their lives, but also their return to the jewellery industry becomes difficult once they move out.
The strike by the Jewellers had taken a political turn when Arvind Kejriwal and Rahul Gandhi extended their support for it. Both the politicians had criticized the government for imposing the tax on ‘poor’ jewellers. This is not the first time excise duty was levied on the sector. Anyway, this time it went worst. About two-third of skilled workforce in jewellery sector has left for their hometown or switched to alternative means of livelihood due to the current strike over excise duty levy. These workers belong to West Bengal and Bihar. They have left for their hometown in large numbers. According to trade sources, workers have left from all across the country for their hometown.
In March, two artisans in Mumbai killed themselves, reportedly because they were unable to meet their expenses after their orders stopped coming in. The Bengali Goldsmith Workers Association estimates that 12 of its members across the country have died since the strike started. Only around 20% remain in the city, said artisans who have stayed behind, and these only because their children are enrolled in schools in Mumbai and are yet to complete their exams. Over 2,00,000 skilled and unskilled workers are employed largely on daily wage basis in the popular Zaveri Bazaar market alone. Normally, they get salary on weekly basis for the number of day’s worked and additional sum for overtime work they do. However, they were facing survival problems as their weekly salary has stopped.
Neither the striking jewellers nor the government is inclined to show leniency over their stand-off. Despite meeting with all top brasses of the ruling Bharatiya Janata Party (BJP) leaders including the party president Amit Shah, the finance minister Arun Jaitley and road transport minister Nitin Gadkari to name a few, the government has hinted no possibility of the excise duty rollback as demanded by the striking jewellers. Interestingly, the Prime Minister’s Office (PMO) has turned down jewellers’ request to meet with the Prime Minister Narendra Modi over excise duty.
Meanwhile, jewellers with half shutter down are doing their business albeit selectively to meet the obligation of their customers for their festive and seasonal demand. They sell jewellery to their loyal customers as usual. However, jewellers are not entertaining new customers. This standoff raises an important question, why the government is so reluctant in removing such a small duty?
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