The country is set to celebrate it's first Diwali since Rs 500 and Rs 1,000 currency notes were held illegal tender on 8 November 2016. The Finance Ministry, since demonetisation, has also unleashed a series of economic reforms, including the consequential Goods and Services Tax.
So, how are the markets faring during this year's festive season?
According to a PTI report, jewellery business may not do as well during this year's Dhanteras as it did last year. Confusion over GST compliance has brought down sales, but jewellers have lined up seductive discounts and freebies to keep people shopping.
Jewellers Making Tempting Offers to Lure Buyers
All India Gems and Jewellery Trade Federation (GJF) chairman Nitin Khandelwal told PTI that while there has been some relief for the market players due to the government's decision to remove gems and jewellery dealers for the purview of PMLA's reporting requirement, the overall sentiment is still dull.
Khandelwal added that jewellers are trying their best to increase footfall and create a positive sentiment in the market, and hence, the market is full of free offers and discounts.
Mostly people will go for light weight or essential jewellery.GJF chairman Nitin Khandelwal to PTI
Gems and Jewellery Dealers Welcome Centre’s Decision to Withdraw PMLA
Managing director for India, World Gold Council, Somasundaram PR, said that while the industry is bracing for the festive season and the trend is looking better than the first half, the market sentiment is not at its full potential. The implementation of GST in July brought a set of challenges which will take a while to resolve.
Somasundaram pointed out that GST was not implemented properly, and putting gold and silver imports from South Korea in the restricted list caused disruptions in the market.
However, the demand will go up regardless and touch the level achieved last year, he said.
According to a Times of India report, gems and jewellery dealers have welcomed the the Centre's decision to remove the gems and jewellery dealers from the purview of the reporting requirement under the Prevention of Money Laundering Act.
Under the PMLA, every reporting entity has to maintain record of all transactions of value exceeding Rs 10 lakh, all cross-border wire transfers of more than Rs 5 lakh, and all purchase and sale of immovable property of Rs 50 lakh or more.
The government, in the beginning of October, rolled back the August 23 notification that notified dealers in precious metals, precious stones, and other high-value goods as persons carrying on designated business and professions under the Act.
Market Sentiment Improving but Not yet Buoyant
Indian Bullion and Jewellers Association (IBJA) director Saurabh Gadgil told PTI that the market sentiment is improving but it has not yet become buoyant.
If the overall business remains same as the last year or goes marginally up by 5 percent, we will be very happy... Also, the slowdown in economy has contributed to the sluggish market sentiment.Sourabh Gadgil to PTI
According to Khandelwal, there have been less buyers this year during Dhanteras and Diwali because there is less currency circulating in the market.
The momentum has started, but is yet to pick up.Nitin Khandelwal to PTI
(With PTI inputs)
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