Budget 2023 fulfils aspirations of Vishwakarmas of jewellery business

It is hoped that states will set up a Unity Mall for promotion and sale of locally crafted jewellery

Vipul Shah February 03, 2023 20:23:10 IST
Budget 2023 fulfils aspirations of Vishwakarmas of jewellery business

Representational image. Moneycontrol

The first Budget in the Amrit Kaal of India has established a strong base to fulfil the aspirations and resolutions of a developed India, to use the words of Prime Minister Shri Narendra Modi.

The Prime Minister referred to the traditional artisans like carpenters, lohar (ironsmiths) sonar (goldsmiths), kumbhars (potters), sculptors and many others as the creator of the nation. This sounded like music to the gem and jewellery industry, which is a key repository of India’s unique craftsmanship and design capital for thousands of years. For centuries, the traditional artisans or the Vishwakarmas of the gem and jewellery business, who created handcrafted jewellery, have brought renown to India. The art and handicraft created by them represent the true spirit of Atmanirbhar Bharat.

New scheme for Vishwakarmas

In Union Budget for FY24, Finance Minister Nirmala Sitharaman announced PM Vishwakarma Kaushal Samman; i.e., PM ViKaS and hopefully this will bring a big change in the lives of crores of Vishwakarmas in the gem and jewellery sector. For the first time, a package of assistance for them has been conceptualized.

The new scheme will enable them to improve the quality, scale and reach of their products, integrating them with the MSME value chain. The components of the scheme will include not only financial support but also access to advanced skill training, knowledge of modern digital techniques and efficient green technologies, brand promotion, linkage with local and global markets, digital payments, and social security.

We are hopeful that after the announcement, States will set up a Unity Mall in their state capital or most prominent tourism centre or the financial capital for the promotion and sale of locally crafted jewellery along with GI products and other handicraft products.

Research Grants for lab-grown diamonds

The Gem & Jewellery Export Promotion Council (GJEPC) extends gratitude to the government for accepting its recommendation to promote indigenous manufacturing in the emerging Lab-Grown Diamond (LGD) sector by providing Research Grants to IIT for 5 years. GJEPC welcomes the reduction of Customs Duty on LGD seeds to zero from 5 percent. It will ensure India’s end-to-end world leadership in rough-to-finished lab-grown diamond and jewellery manufacturing.

In addition, the government has also accepted to have clear segregation Customs (IT HS) codes for Silver and Platinum-studded Lab-grown jewellery for better differentiation and identification at the consumer level.

Increase in duty on precious metals

GJEPC welcomes the move to increase the duty on articles (jewellery) of precious metals such as gold/silver and platinum from 20 percent to 25 percent (+Nil AIDC +2 SWS).

Union Finance Minister has also rationalised the import duty on silver by proposing to increase the import duty on silver dore, bars and articles to align them with that on gold and platinum. However, that will have a net effect of an increase of around 5 percent duty at the import level for silver resulting in an increase in price for silver products domestically.

The enhancement of Income Tax limit to Rs 7 lakh will benefit workers in the gem and jewellery industry. The reduction in surcharge in the highest Income Tax slab will reduce the maximum tax rate to 39 percent (from 42.74 ) and will benefit jewellers who work at slender margins.

Another positive pro-growth move is that the conversion of physical gold into digital gold will not attract capital gains tax.

The increase in the allocation for the Interest Equalization Scheme from Rs. 2,376 crores in 2022-23 to Rs. 2,932 crores in 2023-24, up by 23 percent, will help in supporting exports, particularly by MSMEs and may result in increasing the subvention support as demanded by the exporters in view of rising interest rates.

Revamped credit guarantee scheme for MSMEs

GJEPC welcomes the revamped credit guarantee scheme for MSMEs, which will take effect from 1 April 2023 with the infusion of Rs. 9,000 crores into the corpus. This will enable an additional collateral-free credit guarantee of Rs 2 lakh crore rupees, which will enable to lower the cost of credit by 1 percent. In event of contract failure during COVID-19 by Micro, Small and Medium Enterprises (MSMEs), the government will return 95 percent of the forfeited amount to the enterprises.

The gem and jewellery industry had recommended a reduction in import duty on gold/silver and platinum. We shall engage the Government on allowing the sale of rough diamonds in the Special Notified Zone (SNZ) through the Safe Harbour rule and re-introduce Diamond Imprest Licence.

Indirect Tax proposals aim to promote exports, boost domestic manufacturing, and enhance domestic value addition. We would like to thank Piyush Goyal, the Minister of Commerce and for the support and guidance that resulted in the recovery of exports especially post the pandemic.

The Government’s Union Budget for FY24 reflects its long-term vision to spur the country’s march as a leading global economy all the way to India@100. The first Budget of Amritkaal outlined people-centric agenda of ease of living and doing business to take on global challenges.

The writer is Chairman, Gem & Jewellery Export Promotion Council (GJEPC). He tweets @GJEPC and @GJEPCIndia. Views expressed are personal. 

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