| Around 20 lakh skilled workers employed in about 40,000 jewellery manufacturing units face unemployment after mid-July as their main raw material stock, gold, is fast depleting. The restrictions and the confusion regarding gold imports have been impeding raw material supplies to the units. "Raw material stocks are drying up. Artisans are already sitting idle in several units due to non-availability of raw material," said Haresh Soni, chairman, all-India gem and jewellery trade federation. According to Pankaj Parekh, vice chairman of the Gem and Jewellery Export Promotion Council, around 45 lakh artisans work in the jewellery-manufacturing sector. Of them, almost 15 lakh work for the export segment and 10 lakh on gold supplied by the grey market. "Tho-se working with officially imported gold are affected by the supply crunch," he said. Gold imports are estimated to fall by around 24 per cent to about 38 tonnes in June, following restrictions on imports and jeweller associations banning sale of coins and bars, according to the federation. India imported about 50 tonnes of gold in June 2012, according to official data. During February-March, and even in April, several jewellery units had imported gold in excess, anticipating duty hikes and other restrictions from the government. This excess stock, being utilised right now, is expected to exhaust by mid-July, forcing companies to retrench workers en masse, he added. Soni also said that banks are confused about billing gold imports. Many small and medium jewellery units cannot afford paying cash upfront and have to wait for days for delivery of contracted gold after paying cash. Exploiting the situation, some of the nominated agencies are charging premium on the gold supplies and have also brought down lot sizes, making gold even more expensive after adjusting the freight and insurance costs, Parekh said. Newspaper reports have suggested that a week ago commerce and industry minister Ananda Sharma had assured agitated members from the gems and jewellery industry that supplies would be ensured and had instructed his officials that state-owned MMTC step in to meet the shortage. The finance ministry is also believed to be reviewing the situation. Soni said the federation has submitted a representation to the finance ministry, suggesting ways to curb imports without hurting the jewellery industry. "Our representation includes gold deposit scheme that will encourage people to deposit idle gold lying with them with the government in lieu of some interest for a few years. This gold can then be used for jewellery purpose by the industry and can later be returned to the source," Soni added. He said about 25,000 tonnes of gold was lying idle in the country, and if 5-10 per cent of it was used the shortage would be resolved. "The government has asked us to structure this gold deposit scheme. We are working on it and will present it this week," he added. Soni believes that jewellers would go slow on retail expansion for want of inventory. His federation is also worried about the fallout on the India International Jewellery Show scheduled for August, when manufacturers usually showcase new designs before the global trading fraternity. The jewellery sector is hoping that the current account deficit narrows down to tolerable levels. "We are supporting the government initiatives to rein in CAD and we too are trying to curb consumption of gold bars and coins which have least value addition. However, curbs on the jewellery sector are crippling the highly-skilled artisan community," said Soni. sangeethag@mydigitalfc.com  via Business - Google News http://news.google.com/news/url?sa=t&fd=R&usg=AFQjCNHpiBA6lSVpu7K5d6BhIS3CjJzgag&url=http://www.mydigitalfc.com/news/artisans-be-laid-due-scarcity-gold-680 | |||
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