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Gold
traders in Punjab said ever since the government made it
compulsory to declare all gold being brought in or taken
out of the state, under Section 51, VAT, at the
information collection centres (ICCs), the sales have been
hit hard. Because of security concerns, traders are not
ready to declare their gold at the 32 ICCs in the state.
So, they are not ready to get the yellow metal in the
state and supply is restricted.
Devinder
Khanna, secretary, Punjab Sarafa Association, said as a
result of their compulsory declaration, the availability
is down by over 40 per cent. “Punjab is the only state
to have this regulation on gold trade, and traders are
restricting their supply here for fear of being looted
after they declare the gold at the ICCs, and while they
reach their destination. As a result, new designs of
jewellery are not available to customers here, who are now
thronging to jewellers in Delhi and Mumbai,” he rued.
Amritsar
is one of the main manufacturing hubs for gold jewellery
in the region and traders say that their traditional
jewellery suppliers are now shifting towards the other
manufacturing hubs of Delhi, Mumbai, Rajkot and Kolkata.
If
a trader fail to declare the gold, a fine up to 50 per
cent of the value of metal seized, and an additional
surcharge of 4 per cent is imposed on the defaulter.
It
may be noted that the bullion worth Rs 1200 crore reached
the markets of Punjab last year. This means that gold
worth Rs 3.20 crore was sold daily. But with the new
regulations and the all- time high gold prices, the sales
have been hit. Anand Sekri, a leading Ludhiana-based
jeweller and president of the Ludhiana jewellers
association, said jewellery sales, especially to the NRIs,
was also hit because of the high prices ( Rs 11,750 per 10
gm today). “Gold consumption has come down drastically
over the past two years. Even the NRIs are only getting
their old gold converted into new designs of jewellery.
Though this segment of customers and the marriage season
led to a 40 per cent increase in sales at this time of the
year, this year we have seen no such surge in business,”
he added.
Interestingly,
while the sales are down, the future trading in gold has
picked- up over the past couple of years. Hemant Sood,
channel partner of Angel Broking at Ludhiana, said with a
global decline in rate of interests on bank deposits, a
new interest has emerged in gold investment, which has led
to a sharp increase in prices of gold. “People are even
selling exchanging their forex and investing in futures
trading of the yellow metal,” he said.
Source
: The Tribune - Chandigarh, India, dated
17/02/2008
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