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Overcoming ghost of note ban and ignoring GST’s impact, people throng gold shops on Dhanteras

Author: IANS/Wednesday, October 18, 2017/Categories: Gold

Overcoming ghost of note ban and ignoring GST’s impact, people throng gold shops on Dhanteras

New Delhi/Mumbai/Kolkata/Chennai/Bengaluru, Oct 17 - Come Dhanteras, and the hunger for gold, so visible among Indians, has helped them tide over the impact of demonetisation and the Goods and Services Tax (GST), as customers thronged jewellery stores on October 17.

"We have witnessed very good footfall. Demand for jewellery is definitely higher this year than investment demand," Balram Garg, Managing Director, P.C. Jewellers, told IANS in Delhi, adding "We expect sales to go up by 30 per cent on pent up demand due to various regulatory issues".

Price of 24 carat gold in the national capital was hovering around Rs 30,000 per 10 grams on Tuesday.

'Dhan' in Hindi means wealth, and 'Terah' means number 13. Dhanteras, accordingly, means, the 13th Day of the Krishna Paksha in the month of Ashwin in Indian Lunar Calendar, which in Hindu tradition is devoted to wealth. 

Many seek to buy gold, silver and utensils and invoke the gods to bring in prosperity. In several parts of the country, people also worship the Goddess of Wealth -- Lakshmi.

Echoing similar upbeat sentiments as Delhi, Jayantilal Challani, President of Madras Jewellers and Diamond Merchants Association and a partner in Challani Jewellery Mart, said: "The demand for gold and silver is good. First Dhanteras post-GST regime and also demonetisation and income disclosure scheme issues has settled down. The footfalls in the stores are good."

"During the last six-to-eight months, sales were a bit dull. But for the past few days, the demand is good. The prices have also come down. Today the price of gold is around Rs.2,837 per gram in Chennai," Challani added.

The Centre's recent decision to not make mandatory furnishing of PAN or Aadhaar card details for buying jewellery in cash up to Rs 200,000 had also ushered in a positive sentiment among buyers. The earlier limit was Rs 50,000 as part of the anti-money laundering (AML) guidelines.

"Gold price remains stable and range-bound in the run-up-to the festivals at around Rs 3,000 per gram, which is a positive factor. Footfalls in retail stores have been good since morning. However, compared to last year, sales growth would be tepid," Pankaj Parekh, Chairman of India Bullion and Jewellers Association, Regional (East), said in Kolkata.

Gold is at the centre of festivities and gifting traditions in India, particularly during Dhanteras, Diwali and the wedding season that follows.

"Currently, gold demand seems to be recovering after withdrawal of the AML guidelines. Policy reforms in quick succession in recent years have targeted transparency and the industry is transitioning under GST to a more organised structure, with long term benefits," said Somasundaram P.R., Managing Director, India, at World Gold Council.

"It appears that demand for gold jewellery and branded coins seems to be better than the past quarter, particularly in relation to organised players. A good monsoon and stable gold prices are definitely encouraging consumers to make token purchases for the auspicious festivals. The ensuing wedding season, however, holds the key for the quarterly demand performance," he added.

In Mumbai, All India Gems & Jewellery Federation Chairman Nitin Khandelwal said that with AML issues having been amicably resolved, buyers' sentiments have been boosted.

"Though the footballs are increasing, we do not expect any growth over last year's sales. We shall be happy even if last year's sales/quantity figures are achieved, coming after demonetisation, GST and RERA (Real Estate Regulatory Authority)," Khandelwal said.

However, the demand for gold jewellery for the Diwali festival in Bengaluru remained subdued because of negative sentiment and regulatory issues. Continuous rains for several days may also have done their bit to dampen enthusiasm for buying gold.

"Though GST is not an issue as the rate is only 3 per cent on gold and jewellery, customers are wary of buying, as PAN card is mandatory if the bill is more than Rs 2 lakh," Bengaluru Jewellers' Association President Y.S. Ravikumar said.

"Owing to less purchasing power among the upper and middle classes, demand for gold or jewellery has not picked up since demonetisation on November 8 last year," he added.

Also with continuous rains in the city over the last fortnight, footfalls in retail gold shops or showrooms across the place have been 40 per cent less than they were last year.


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Kavita Giridhar Mallya


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