The revision in the duty structure for gold has hit business, putting artisans and their livelihood in jeopardy. Bikash Bagh (56), a gold karigar in Zaveri Bazaar since 1988, has seen many buying cycles, but business over the last few months has hit an all-time low.
Impact on Artisans
"The revision in the duty structure for gold will further bring down business. All the new orders received last week have been cancelled following the announcement. I have two children studying in English medium schools in Mumbai, how will I manage to pay their fees?" he said. Earnings for many goldsmiths have dwindled from Rs 25,000 a month to Rs 10,000 a month.
Kalidas Sinha Roy, general secretary of the Bengali Swarna Shilpi Kalyan Sangha, an association of about 5,000 gold artisans in Mumbai, said, "We were anyway struggling to survive as a community as if we were in the ICU, owing to the high prices of gold. Now we are figuratively in coma after the recent announcement. Earlier, every karigar used to work on at least 500 grams of gold a month. Now, each one will struggle to even get even 50 grams of work." Many artisans who had gone to West Bengal for elections have cancelled their return to Mumbai, because if work is less then the cost of living is too high, Roy added.
Price Surge After Duty Hike
The increase in import duty on gold from 6% to 15% has instantly pushed up prices of gold by Rs 10,000 and silver by Rs 22,000. The price of gold (without GST) is hovering at Rs 1,61,349 per 10 grams, and silver is at Rs 2,87,350 per kilogram. The price of gold on Tuesday, before the import duty hikes came in, stood at Rs 1,51,632 per 10 grams (without GST), and silver was at Rs 2,64,867 per kilogram.
The scorching heat and the hike in import duty on gold have driven buyers away from Mumbai's Zaveri Bazaar. Anil Jain, a jeweller in the market, said, "The impact of the PM's announcement is already taking shape. The crowd has decreased in the market. There is likely to be a significant impact on sales and overall demand. We expect people to buy only bare minimum or essentials for the wedding season."
Consumer Sentiment
Rishi Motwani, a resident of Baner, said, "Prices are very high and it would be foolish to buy gold right now. The PM has also made an appeal. We have a wedding in the family this year, so we will make do with whatever has already been bought and get some quantity exchanged."
Rajnish Varma, who owns Lakshmi Narayan Jewellers in Kolkata, said, "The drop in demand for gold will be temporary. In the long-term, it will continue to be a good investment. However, we expect a 20% dip in sales in the short term."
Bivash Chandra Maity, general secretary, Delhi Swarnkar Sangh, said, "If customers have to melt their old jewellery and remake it, there will be a loss of gold in the process. Nobody will want to lose out. I believe that work is going to further reduce by 80%. A lot of the goldsmiths who are out of work have taken to selling vegetables or driving autos."
