Rs 200 crore lost to jewellers’ strike

The ongoing strike by gold jewellers against 1% excise duty on unbranded jewels has brought down sales by at least 50 %.

Published: 30th March 2012 04:03 AM  |   Last Updated: 16th May 2012 09:49 PM   |  A+A-

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HYDERABAD: The Finance Minister’s budgetary proposal of 1 per cent excise duty on unbranded jewellery is taking its toll on the revenue generated by numerous jewellery stores dotting the city. As per estimates put forward by the Jewellery & Saraf Association, Hyderabad, the 5000 plus shops in the city selling unbranded jewellery have been incurring a minimum daily loss of Rs 25,000- 40,000 per shop.

And with the strike into its 13th day, the total loss in business transactions over the past many days has been pinned at a minimum of Rs 200 crore. This, while the national loss has been put at Rs 11,000 crore.

“The situation is bad. But we will force the government to listen to our requests. Else, we will suffer in the near future,” said Ramesh Chand, president of the Jewellery & Saraf Association, Hyderabad.

Asked about the government’s tactics to reduce investment in gold, since it was seen as a wasteful and immovable asset, Ajay Kumar, treasurer of the association, replied, “If the government wants to curb investment in gold, let them increase VAT by 1- 2 per cent. It’s the customers who will anyway pay the final higher price. But we do not want the excise duty to go up. That will not only encourage smuggling and black marketing, but also increase harassment by local excise officials against us."

Ramesh Chand also said that the loss figure of Rs 40k was for the small and medium- sized shops. “The larger shops incur even greater losses.”

And even as shops continue to down the shutters, those that remained half open are utilising the period to renovate or clean the interiors, even as they put off any customer requests for sale.

And in a show of unity, no shop owner showed any intent on letting go of the strike, till the government rolled back the excise duty.

“The strike is indefinite and will continue till next Monday for sure. After that we will take a decision”, said at least half-a-dozen jewellers sitting in a circle near Madina.

Ramesh Chand further said that since Wednesday, many shops selling precious stones had also joined the strike expressing solidarity with them.

“Soon even pearl shops will follow suit,” he claimed.

The row of closed pearl shops near Lal Bungalow, Begumpet, Abids and Koti on Thursday, might be sure signs that the next phase of the strike has already begun.

THE RIPPLE EFFECT

What’s Charminar without the usual milling of the crowd, loud hawkers, aggressive sales boys and overcrowded footpaths and roads, one might ask.

But for tourists and visitors to the heritage monument these days, none of the the usual Old City charms are present to greet them.

The ongoing strike by gold jewellers has taken the glitter off the auxiliary businesses in the region, bringing down business by at least 50 % for roadside hawkers, clothes shops, pearl and imitation jewellery stores, as well as for the local food stalls.

“Just look around. The crowd is so thin. The lack of customers to gold stores due to the strike is affecting our business as well,” rued Swami, a hawker selling imitation jewellery, at the entrance to Laad Bazar.

At Shehran Market, Shoaib who runs Sona Dress shop claims that his business has been very lukewarm in the past one week.

“People would buy jewellery and then enter our shops as well. But now that has been negated, and sales have dipped by more than 50 per cent,” he said.

Even owners of pearl stores said that the closure of gold shops hadn’t increased their sales. Rather it had dipped further.

“We are incurring a loss of minimum Rs 20,000 per day. Customers wanting to buy gold, will never settle for pearls. That this strike is taking place with the marriage season round the corner is even more of a loss for us,” said Lokesh of Krishna Pearls.

Then there’s the problem of handling street savvy customers.

“Customers are less, and so we sell off our products at the minimum price they bargain for. We are helpless, since we have to make some sale, even if it’s at minimum profit. We can’t afford to be demanding till the strike gets over,” said Arjuna, a hawker selling plastic bangles and imitation jewellery, with a look of utter disappointment across his face.

The end of the financial year sure has brought little cheer to these freelance businessmen.

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