Negative growth to continue in gem & jewellery sector: GJEPC

Mumbai: The gem and jewellery sector will continue to witness the negative growth in the next few months, in the absence of major incentives in the Interim Budget presented by the UPA government on Monday.
The Interim Budget for 2009-10 which was presented in Parliament, extended the period for concessional finance to exporters hit hard by the recession in major global markets. Earlier, the interest subvention of 2% could be availed of till March 2009.
“The interest subvention of 2% on pre- and post-shipment credit for certain employment-oriented sectors, textiles (including handlooms and handicrafts), carpets, leather, gems and jewellery, marine products and SMEs was extended beyond March 31, 2009 to September 30, 2009 involving an additional financial outgo of Rs 500 crore,” said finance minister, Pranab Mukherjee who presented the Interim Budget in the Lok Sabha on Monday.
The domestic gems-and-jewellery industry is going through a difficult phase on the back of softer demand from key export markets such as the US and Europe and, to a lesser extent, Asia.
Reacting to the Interim Budget speech, Vansant Mehta, chairman, Gem and Jewellery Export Promotion Council (GJEPC) told FE: “We expected an increase in the subvention rate to 4% from the current 2%. For the short-term period, we don’t see any growth in the next few months. I think the gem sector will continue to witness negative growth in the next month also.”
Export of gems and jewellery from the country for the month of January 2009 registered negative growth and declined by 33.94% in dollar term and 20.32% in rupee terms. “There was nothing in store for the gem and jewellery exporters though, as against the expectations of an official rescue package for the sector that could have eased service tax refunds and exempted them from fringe benefit tax for a certain stipulated period,” said Anand James, a senior analyst with Geojit Comtrade.
“In the Interim Budget, the government has totally neglected the issue of unempolyment in the sector.
The current condition is bad involving the lives of 8 lakh workers employed in the cut and polished diamond sector and 15-20 lakh workers employed in the gold jewellery sector,” Mehta said. (source: Financial Express)