Illegal activities associated with the gold business can be curbed if the government cuts import duty from the current 10 per cent to one or two per cent, according to MP Ahammed, Chairman of Malabar Group.
Along with GST, he said, there should be regulations in the form of a tracking system right from the place of production to the end-user to check the unaccounted business currently being carried out in the unorganised sector, which accounts for as much as 70 per cent of the trade in India.
“The government should give more importance to the organised sector and strict regulations should be in place to curb the business of the unorganised sector. The government will see an increase in tax income as well as being able to curb the growth of mafias and their illegal activities,” Ahammed told BusinessLine.
The industry grew at a slower clip this year — around five to ten per cent, he added. Those who work in the organised sector have seen growth while the unorganised sector witnessed a “degrowth”. However, he said that in the next two years, a shift from the unorganised sector to the organised sector is bound to happen.
The international rates of gold will also possibly go up, he said. As a hard currency, gold’s price will become strong, as against the weakening currencies across the globe. “This will likely have a positive impact for people who invest in gold in the next fiscal year…A positive growth is expected for the gold industry in 2019,” he said
“Gold is mostly a wearable investment for people, and especially when the currency devalues, gold will get the natural edge. It is at the international dollar rates that gold’s price is determined. When gold’s rupee value decreases, its price will automatically increase. This year, without an increase in the international gold price, India’s gold value increased.”
Over the years, the value of gold has increased and it is a value-gaining investment. This year, this value addition has happened with the reason being weakening of the rupee, he said.