MUMBAI (Commodity Online): India Government should utilize the excess revenue generated from the recent hike in gold import duty for creating new hallmarking centres and to fund research and development activities in mining sector, according to Prithviraj Kothari, Director of Riddi Siddhi Bullions Ltd, one of the largest bullion dealers in India.
In a pre-India budget (2012-13) note released to Commodity Online, he has observed that the new customs duty of 2% on value of gold imports replacing the flat Rs 300 per 10 grams and 6% in silver replacing the earlier flat rate of Rs 1500 per kilogram will nearly double the duties on the two metals. The extra revenue could be used productively for the benefit of the industry.
“Hallmarking is a great move by the government. It will ensure customer satisfaction by purity assurance. For this, the current need is to increase the hall marking centers at a faster pace so that the implementation is done in no time,” Prithviraj Kothari said.
Research & development is the key to the future of Indian bullion industry. India is rich in mines but the R&D is so poor that we are hardly in position to extract much of its abundant resources. To be precise the country produced and refined only a minuscule 2.46 tonne worth Rs312 crore in 2008-09, the latest period for which data are available. That’s less than 1% of the value of metallic mineral production in the country.
On the other hand, China boosted its gold refining business after it gave companies a single-window clearance along with fiscal and infrastructure incentives, he said. Today, the country produces and refines about 320 tonne(approx.) of gold annually, the most in the world.
“ I feel that if R&D is carried in an efficient way, production of the metal will increase. This will reduce dependency on imports and in turn help the government to increase the forex reserve. As the metal will be extracted locally, customers will be benefitted pricewise, due to local production,” Prithviraj Kothari added.
