Budget: Jewellers say digitisation will boost sector, drive consumption

However, proposal to ban all cash transactions above Rs 3 lakh might affect demand in the sector

Taking a stance of 'no news is good news' jewellers Wednesday hailed the Union Budget, saying the focus on digitalisation is going to give an impetus to the sector and drive consumption.

"Focus on farmers, infrastructure and digital economy will create transparency and will have an overall positive sentiment in the market," PNG Jewellers Chairman and Managing Director and India Bullion and Jewellers Association (IBJA) Saurabh Gadgil told PTI here.

He said the Government announcement on establishing gold spot exchange is also a positive move and will lead to better price discovery of the yellow metal.

"This move will help in our country's participation in determining gold price in the international markets. Overall, this is a positive Budget. Moreover, we go with no news is positive news thinking," he added.

Echoing a similar view, GJEPC Chairman Praveenshankar Pandya said the Government's proposal to extend Pradhan Mantri Kaushal Kendras to more than 600 districts across the country, from the 60 districts at present, will help in creating skills for the gems and jewellery sector as well.

"We welcome the move as the focus to improve on the quality and the market relevance of vocational training will also benefit our industry," he added.

Besides, the proposal of reducing income tax for smaller companies with annual turnover up to Rs 50 crore to 25 per cent will encourage medium to small jewellery exporters and manufacturers, he said.

All India Gems and Jewellery Trade Federation (GJF) Chairman Nitin Khandelwal opined no new tax proposals is a positive move for the sector.

However, on the Government proposal to ban all cash transactions above Rs 3 lakh beginning April 1 might affect demand, especially in the gems and jewellery sector.

"Due to transaction fee on all digital purchase, the demand is likely to be affected. However, we will be more clear on the issue when we get the Budget document," he said.

Anmol Jewellers Founder Ishu Datwani opined that the Budget has been on expected line.

"The fillip to the rural and infrastructure is a plus. Thankfully, there has been no negative announcement for the jewellery sector. In totality it's a positive budget. Sometimes there are people like the non-residents, who have official cash over Rs 3 lakh. So the business may be affected but it's a small negligible percentage," he said.

Lala Jugal Kishore Jewellers Director and IBJA Director Tanya Rastogi said the Rs 3 lakh cash cap will not have much impact on the jewellery industry as there already is mandatory PAN for purchase of Rs 2 lakh or above.

"Since other cash-based industries may be hit by the ruling, I expect this will divert more cash towards our industry," she added.