MUMBAI: Jewelers across gold-loving India started a three-day strike yesterday in a bid to force the government to shelve plans for a controversial excise tax announced in this week’s budget. Indian finance minister Arun Jaitley on Monday proposed to reintroduce a one-percent levy on some jewelry transactions as he laid out his budget for the financial year 2016-17, angering the industry. “Today we are left with no options but to go for 72 hours’ token strike,” Ashok Minawala, an All India Gems and Jewelry Trade Federation (GJF) representative said in a statement late Tuesday. “Pan India, all retail jewelers, manufacturers and wholesalers have decided to join the strike expressing their anguish over the government apathy towards the industry,” he added.
At the normally bustling Zaveri Bazaar-the centre of India’s jewelry trade-in the western city of Mumbai, the majority of shops were closed but some opted to stay open yesterday. Union leaders hope the industrial action, which runs until Friday, will be as successful as a three-week nationwide strike in 2012, which forced the previous Indian government to drop its plans for an excise tax. A one percent excise duty was also introduced in 2005 before being quickly dropped.
Industry officials say the planned tax will damage growth as it will make certain purchases more expensive for buyers, at a time when demand is already weak due to the global financial slowdown. Long-running strike action by the jewelry industry would pose a major headache for Prime Minister Narendra Modi as he bids to kick-start economic growth and bolster his government’s flagging popularity.
India vies with China for the title of the world’s biggest consumer of gold and has an insatiable appetite for jewelry, with diamonds and bangles proving popular gifts at weddings and festivals. India is believed to have around 20,000 tons of gold lying idle in temples and homes and Modi is also currently trying to bring this wealth into the formal economy through a gold monetization scheme.
India is now the world’s fastest-growing major economy but Modi is struggling to push much-needed reforms through parliament. Protests over jobs turned deadly recently while the ruling Bharatiya Janata Party received a hammering in state elections late last year. — AFP