Gold sales dipped by 60% in Maharashtra this year, says jewellers’ body

The loss in business amounts to Rs30,000 crore

The bullion trade witnessed one of its worst years in 2017 as gold sales in Maharashtra dipped by a staggering 60 %, totaling approximately Rs20,000 crore as opposed to its usual annual business of around Rs50,000 crore over the last few years. The Mumbai Jewellers Association put down this loss in business of Rs30,000 crore to various reasons like demonetisation, Goods and Services Tax (GST) , the Prevention of Money Laundering Act (PMLA) Act 2002 (which has since been repealed), along with the slowdown in the economy.

Jewellers attributed the drop in sales to factors like demonetisation, GST and the slowdown in the economy (HT FILE)

In addition, gold prices also breached the mark of Rs31,000 per 10 grams for some time, which again reduced sales, said traders in the city.

“First, demonetisation played havoc as people had no cash to buy gold. Now buyers are reluctant to buy by cheque as they feel they will come under the Income Tax (IT) scanner,” said Kumar Jain, vice president, Mumbai Jewellers Association. “The PMLA Act where customers were supposed to submit their KYC (Know your Customer) details paralysed trade for one-and-a-half months and spoiled the Dussehra festival sales,” he added. The Mumbai Jewellers Association compiled the figures.

The PMLA rules, which were notified on August 23, were withdrawn on October 6 due to the huge decrease in sales.

The Mumbai Jewellers Association called the 60 % decrease “unprecedented.” “We lost more than Rs30,000 crore of sale this year due to various reasons. Every year, we clock at least Rs50,000 crore of sales which has come down to Rs20,000 crore this time,” said Jain.

According to jewellers, the high cost of essential household commodities has also acted as a dampener. “For people, gold is a luxury. It enjoys the last priority as we see them struggling to meet their day-to-day expenses. Hence this also impacted sales,” said Amit Mehta, owner, Amit Jewellers in Malad.

Gold plays an important role for Indians, especially during weddings and other festivals. Four festive days are considered especially auspicious to purchase gold in India — Gudi Padwa, Akshay Tritiya, Dussehra and Dhanteras. India is one of the largest markets for gold trade and the world’s second largest importer.