Despite the pressure on gold prices and the new excise duty, all may not be lost for jewellery retailers.
Akshaya Tritiya is a holy day for Hindus and Jains. It usually falls in the last week of April or in the first fortnight of every year. While the day is said to symbolise many religious events, for Vinay Kumar, like a large number of his countrymen, the day stands out for one reason mainly. Akshaya Tritiya is the day when, every year, he buys some gold in the form of ornaments or increasingly in the form of gold coins, as he believes that anything bought on that day will ‘multiply and be profitable’.
That was a strategy that paid off handsomely for more than a decade for 47-year-old Kumar, a fast-talking businessman who runs a hardware store. However, in 2015, he says, for the first time in nearly 15 years, he chose not to purchase gold . “In the previous three years, my purchase price was significantly higher than its current value,” he says. “In 2012, I was charged around `2,800 per gm of gold, excluding making charges, whereas the price in 2015 hovered around `2,300. I am unlikely to buy in 2016.” Even though prices have of late recovered to `2,900 per gm, they are still far below the `3,200-plus level touched in the middle of 2013.
The fall in gold prices and the resulting collapse in demand has not been kind on gold retailers such as Titan and Kalyan Jewellers. And just when they were starting to breathe a little easy due to the recent mini-rally, this year’s Union Budget dropped a bomb – it proposed 1 per cent excise duty on gold and diamond jewellery. The livid retailers say this will hit the nascent recovery and, in response, have gone on a nationwide strike.
This story is from the March 27, 2016 edition of Business Today.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 8,500+ magazines and newspapers.
Already a subscriber ? Sign In
This story is from the March 27, 2016 edition of Business Today.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 8,500+ magazines and newspapers.
Already a subscriber? Sign In
"Hire for attitude, not ability"
Thryve Digital is a player in the healthcare technology sector delivering next-generation solutions
Road Warrior
For Khalid Wani, Senior Director of Sales at Western Digital India, life is much more than just the corner office. Biking across the world is one way he derives meaning for his life
WIDENING THE POOL
THERE HAS BEEN A JUMP IN INDIVIDUALS INVESTING DIRECTLY IN THE STOCK MARKETS, BUT MUMBAI AND AHMEDABAD STILL ACCOUNT FOR THE LION'S SHARE. THERE DEFINITELY IS SCOPE FOR IMPROVEMENT IN TERMS OF PENETRATION LEVELS ACROSS THE COUNTRY
CRISIS IN THE CLOUDS
INDIAN AVIATION IS IN CRISIS. AIRLINES ARE GRAPPLING WITH FLIGHT CANCELLATIONS, CREW SHORTAGES, AND COMPLAINTS ABOUT POOR SERVICE, ARE BLEEDING DUE TO RISING COSTS WILL THE FASTEST-GROWING AVIATION MARKET RECOVER?
"India should start privatising public sector banks"
Arvind Panagariya, Chairman of the 16th Finance Commission, on growth, inequality, jobs, the banking sector, and more
THE DARK SIDE OF GOLD LOANS
THERE HAS BEEN A SHARP RISE IN GOLD LOANS IN RECENT YEARS. BUT THERE IS A SEEDIER SIDE TO THIS, AS IS EVIDENT FROM THE RED FLAG THE RBI RAISED RECENTLY. WILL THE REGULATOR'S MOVE PROTECT CUSTOMERS?
"I LET MY WORK DO THE TALKING"
Megha Engineering & Infrastructures MD P.V. Krishna Reddy on being low profile, the infra opportunity and much more
"Core of insurance lies in long-term security"
Vibha Padalkar, MD & CEO of HDFC Life, on the insurance provider's performance, surrender charges, and future innovations
Distress in the Books
Bandhan Bank, the brainchild of Chandra Shekhar Ghosh, has made the journey from an MFI to a bank, but with many hurdles. Now with his resignation as MD & CEO, is the lender staring at more uncertainty?
A Stellar Debut
The TAC Infosec IPO saw bids worth ₹8,417.33 crore pouring in, thanks to intense bidding from all categories of investors