Based on recommendations by Niti Ayog, the gold trade expects the newly elected government to develop gold as asset class. The trade is also expecting that government will make an effort to increase banking to the gem and jewellery sector, which has been facing the brunt of the banks after the infamous Nirav Modi scam.

“The gold policy will pave way for the formation of gold board, mandatory hallmarking, introduction of a revised Gold Monetisation Scheme (GMS), setting up of spot exchange and bullion bank. It will also lead to increase digital transaction in gold trade,” said Surendra Mehta, national secretary, India Bullion & Jewellers Association. Ayog suggested last August that the country would benefit from reducing the import duty from its existing 10 per cent and GST rate should be reduced from its existing 3 per cent. The high import duty rate has led to increased entry of gold into the country through unofficial means resulting in loss of revenue for the Government. It was also recommended that the existing GMS and gold bond schemes needed a rehash along with the formation of a gold board and bullion exchange across the country.

It has also suggested exemption of 3 per cent integrated goods and service (IGST) to be paid by exporters in line with customs duty with a provision of bank guarantee. GJEPC is of the opinion that government should make bank finance available to the sector by transforming the gold market. Colin Shah, Vice Chairman, Gem & Jewellery Export Promotion Council commented, “Once the banks come out from Prompt Corrective Action (PCA), finance will be made available to the sector.”