Will FM Sitharaman alter customs duty on gold this Union Budget?

Nirmala Sitharaman
Nirmala Sitharaman

Though gold is mostly considered a favourite of women in general, the interests of women, in reality, have no relevance when yellow metal is put on a weighing scale.

When India attained Independence in 1947, the price of gold was just Rs 77 per sovereign. After seven-and-a-half decades, the gold price stands at Rs 41,760 per sovereign. Even if you pay this much, you won’t get an equivalent piece of gold jewellery. You have to pay the 5 per cent making charge. The value then adds up to Rs 43,848. When a 3 per cent GST is accounted for, the price further rises to Rs 45,163.

Has any woman dared to raise her voice against this appalling price? Has any organization come forward to form a women’s chain or women’s wall in protest? Then, instantly, another question pops up. While the Union Finance Minister is a woman, has she taken any measures to prevent the gold price hike? The answer will be in the negative.

In that case, can we hold Nirmala Sitharaman responsible to an extent for this price hike?

The Finance Minister raised the customs duty on gold from 7.5 per cent to 12.5 per cent. When the 2.5 per cent cess is added to it, the total duty comes to 15 per cent. Then comes GST, taking the total duty to 18 per cent. The Finance Minister said she increased the duty to reduce the current account deficit by controlling import expenses. The thought that the import expenses will come down in this manner is unreal. Until the craze for gold wanes, the demand for gold continues to rise. That means the import will only increase. The duty increase will ultimately lead to a rise in smuggling. And that is what is happening now, widespread smuggling, without attracting even one percent of duty.

The World Gold Council estimates that there is an increase of 33 per cent in smuggling now compared to pre-Covid-19 levels. That means almost 160 tons of gold has been smuggled into the country without attracting duty in recent times. Are these figures not enough for the Finance Minister to understand the futility of increasing the duty? If there is no proposal in the coming budget to reduce the duty, the country will only be staring at an increase in gold smuggling.

Now a few words about gold making. Earlier, the jewellers used to meet a part of their requirements by melting old ornaments with the raw gold imported with low duty, and by purifying them. But when smuggled gold is available for a lesser price, who needs old gold?

This leaves women in further despair. Those who are into the business of melting and purifying are also in a state of despondency. Over 30 such operators in the country and their workers face the prospect of losing jobs.

The womenfolk of the country now expecting a correction from Nirmala Sitharaman, who is the first woman to get the opportunity to present a Union Budget after Indira Gandhi and is the first full-time woman Union Finance Minister.

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