Kerala merchants urge govt for EMI facility to purchase gold jewellery

Kolkata: The price of gold has moved beyond Rs 102,000 per 10 gms. Add 3% GST and it sails past Rs 105,000. Add to it making charge and it is easy to see why gold jewellery has gone beyond the purchasing power of most middle class people. Jewellers are also complaining of declining sales in view of such high prices. Though there might be some temporary correction, none is expecting a big drip in the price of the yellow metal. If this price level holds, it is clear that the sale of gold jewellery will suffer in the festive and wedding season that is to begin within a few weeks.

Against this backdrop, All Kerala Gold & Silver Merchants Association has urged Union finance ministry to allow EMI facility for purchase of gold jewellery, stated reports. Else, middle class families will not be in a position to buy gold jewellery. Since gold is a embedded in the Indian culture and traditions, such high prices deter purchases and cause hardship to the people.

According to reports, K Surendran and S Abdul Nazar, president and general secretary of All Kerala Gold & Silver Merchants Association said in a plea that EMI is formally applicable to a whole range of consumer durables and gold now deserves to get it too. Once this facility gets the nod of the government, the two office bearers said, mor transactions would come under the purview of GST.

The Kerala gold merchants association has urged the finance ministry to take the issue up Reserve Bank of India, Indian Banks Association and non-banking financial institutions so that EMI-backed purchases of gold jewellery can be formalised. They have argued that the ecosystem will become as transparent a system as the consumer durables market.

Incidentally, the practice of EMI takes into account the creditworthiness of an individual and whether he/she will get the facility will depend on his/her credit score. While those with a healthy credit score can easily get financing, those with a poor score will be denied the facility or get unfavourable conditions. It will become like just any other lending system.

Incidentally, IBJA (India Bullion and Jewellers Association) has already urged the government to allow 9 carat gold jewellery. The justification was the same: zooming prices are making gold jewellery prohibitive for most potential consumers. The Centre has subsequently allowed the hallmarking of 9 carat gold jewellery to help the industry and consumers alike.

Significantly, the demand for physical gold in the second highest in India, next only to China. It is natural that the demand for EMI facility has come from Kerala, which accounts for about 28% of the national demand, reports state. The EMI facility to buy gold jewellery will help both the consumers as well as the organised gold jewellery business.