Gold is a commodity which govt can control, but jewellery is need of consumers which cannot be controlled: Jewellers

New Delhi, Dec 7 (KNN) Cash crunch has hit trade across the sector, but one of the most affected business is of jewellers during the peak marriage season as people don’t have enough cash to buy gold and the sellers cannot accept cheques from every customer for purchase of jewelleries.

This has led to a steep plunge in their businesses and the ones who are most affected are the small or micro entrepreneurs in the sector who mostly get work from the big players or they do small works like repair, polishing for which people have to be willing to spend cash.

Demonetization declared on November 8 has greatly affected valuable metals.

The gold rate has fallen to 27,907 rupees per 10 grams. Silver too dropped following meagre demand.

Shopkeepers, especially the small ones, said they are not willing to open their shops as there is no customer.

“Market is under huge loss. And the main reason behind the fewer footfalls is that people have gone under hibernation” Ashok Minawala, Spokesperson, All India Gems and Jewellery Trade Federation told KNN.

The move of government in motivating digital payment gateway is proved to be huge loss of the market especially for the valuable metal. Most of the people in India still believe in cash payments. This problem is even bigger for the seller as all of them don’t have swipe machines and they don’t accept payment through cheques as there are chances of fraud.

Rakesh Sarraf of Karol Bagh Jewellers Association told KNN that after demonetization was announced everybody is cashless and sale has dropped to nearly 5 percent. The customer who has credit card can purchase up to 50k or max 1 lakh.

“How would I sell gold to someone against the payment in cheque,” he said adding “We are not able to pay to our workers as banks don’t have money.”

People are not using digital payment gateways and banks are not providing the enough cash in hands. Although government is assuring many times that problem will be solved soon in the coming days but the ground reality is that lines are becoming larger and larger at the bank counters and ATMs as the day passes.

“We are facing zero business here.  Main reason is that no sufficient amount of new currency has entered in the market and thus people are not getting money to purchase,” said Raju Bhai, Swarnkar Sangh Amreli, Gujarat.

According to the jewellers associations their business is like that fish which is surviving on the few last drops of water and the heat of demonetization is drying even those last drops.

“Gold and jewellery are two different things, gold is commodity and government can control it. But jewellery is the need of the consumer and government cannot bring any control over it,” said Minawala.

They feel that more than half of the market will not able to revive their loss in next two years.  Their belief becomes more realistic when the news like that the hold or purchase of gold will also has to face limitations parameters, are started fuming in the air.

“Already the decision has bad impacts on the market of gold and in this if government put limit over gold then market will die very soon” said Sarraf. (KNN/RAS)