GML is a mechanism under which a jewellery manufacturer borrows gold metal instead of rupees and settles it with the sale proceeds.
“We have written to the Union finance minister and the Reserve Bank of India (RBI) seeking immediate financial assistance and banking related relief for the stressed gems, jewellery and allied businesses post the devastating second wave of the global pandemic Covid-19,” All India Gem & Jewellery Domestic Council chairman Ashish Pethe told ET.
The federation has nearly 300,000 jewellers as its members.
Pethe said several jewellers are finding it difficult to repay loans. The federation has therefore sought an extension of the moratorium on interest payments for the stressed gems and jewellery sector for a period of six months. It has urged the government for assistance to restructure loans given to the gems and jewellery businesses through a one-time subsidy.
“For almost two months of 2021, the domestic gems and jewellery industry and their stores/shops were shut, even as key festivals such as Gudi Padwa and Akshaya Tritiya fell during lockdown for the second year in a row,” said Pethe. “The government allowed weddings during lockdown, but jewellery businesses do not fall under the ‘essential’ category. Even after the slow opening of the states, the next few months will be difficult and challenging for the industry, which offers livelihood to lakhs of people and their families.”
GML should be extended to 270 days, as offered to exporters, said Pethe. “The RBI had allowed banks to extend GML validity to 270 days during lockdown in 2020. We have requested the finance minister to increase it to 270 days this time around too,” he said. “Internationally, GML is offered a tenure of one to two years. If GML is extended, then it will benefit the government as the current account deficit position will improve with a substantial reduction in gold imports.”
Saiyam Mehra, vice chairman of the council said: “The government should allow a moratorium on interest for six months to the stressed gem and jewellery sector and allow six months to pay the accumulated interest in equated monthly instalments.”