UNION BUDGET 2023: 10 TAKEAWAYS FROM BUDGET 2023

One of the biggest demands of the gems and jewellery sector was for the government to bring down the customs duty on gold to 10 per cent to eliminate smuggling - but the demand went unheard, yet again. However, reforms announced for the MSME sector, agriculture and infrastructure along with significant income tax will give an overall boost to the industry.

- Vijetha Rangabashyam

Union Budget 2023 was a crucial one for many reasons. Finance minister Nirmala Sitharaman hailed India’s economy as “a bright star” in the world – as the economy is projected to grow at 7 per cent this financial year. The balancing act was a tough one to execute as Sitharaman had multiple issues to address. On the one hand, the budget had to address the steep economic downturn caused by Covid-19 and Russia’s war on Ukraine, spiralling inflation, unemployment in specific sectors, IT being one of them and on the other, the budget had to also gain confidence, as India is a host for G20 Summit this year. Politically, the Narendra Modi-led government has nine state elections this year, followed by the general election in 2024. There was a lot at stake – the reforms announced at the budget had to keep in mind India’s middle class, the economy at large where exports play a crucial role, infrastructure, agriculture, healthcare among others.

The Indian gems and jewellery industry which contributes around 7% to the country’s overall GDP employs over 5 million people. The sector is nuanced, dominated by independent (family-owned) entities on the one hand, chain stores on the other and a gamut of manufacturers who have their own specialty when it comes to manufacturing jewellery, cut and polished diamonds as well as gemstones to both domestic as well as international markets.

The industry was eagerly waiting for the budget announcements hoping that a prolonged request to reduce customs duty on gold, which currently stands at 12.5% for the yellow metal in the form of bullion and doré bars. In addition to this, there is also 3% of GST on gold jewellery. However, these issues were not addressed at the budget leaving the industry disappointed.