Budget 2018: A comprehensive policy planned for the gold sector

Finance Minister Arun Jaitley's announcement on the government's plan to formulate a comprehensive Gold Policy has been welcomed by the industry, though they felt the important issue of the import duty on gold has not been addressed in the Budget.

"The government will also establish a consumer friendly and trade efficient system of regulated gold exchanges in the country," Jaitley said in the Union Budget 2018-19.

"The government's announcement that it will formulate a comprehensive gold policy to establish gold as an asset class is ground-breaking. The establishment of regulated gold exchanges is exceptionally positive towards making gold a mainstream national value-added asset", said Somasundaram P.R., Managing Director, India, World Gold Council.  

A stable policy environment and a fair and effective trading market will bring much needed transparency and stability, he added.

"The estimated growth of GDP to 7.2-7.5% in the second half of 2018 should help boost consumer demand and give a positive momentum to gold and jewellery sales. Moreover, the positive focus on the rural economy is expected to benefit the farmers with more disposable income which also augurs well for the industry", said T.S. Kalyanaraman, Chairman & Managing Director, Kalyan Jewellers.

He noted that the issue of import duty on gold has not been addressed in the Budget. The industry was expecting the duty to come down by 2-4 per cent. Gold prices in India, the world's second-biggest user, were cooling off in the past few weeks as jewellers were hoping that the government would cut import duty in the Budget.

Talking about the government's Gold Monetisation Scheme, Jaitley had also said it would be revamped to enable people to open a hassle-free Gold Deposit Account.