Amritsar gold losing shine to Rajasthan

The gold bazaar, near the Golden Temple, is losing its lustre. Once-famous Guru Bazaar, known for shops dealing in designer gold jewellery and also wholesale products, is facing a loss of trade to Rajasthan because of high prices of gold here, along with competition and the low rate of 0.25 per cent VAT on gold jewellery in the desert state, compared to 1 per cent in Punjab.

There are 170-200 shops in Guru Bazaar. Sant Ram Shoor, proprietor, Sant Ram Jewellers, said, "It is because of varieties and designs that customers from every part of the country used to throng this place. It is the craftsmanship of Amritsar jewellery that makes it unique. There is something for people of all age groups. There are a variety of gold items""from ear-rings to toe-rings. It is not just women that the jewellers cater for, for men too, there is a wide range of wrist chains, bracelets, neck chains"

Amritsar-made jewellery has great demand in Uttar Pradesh, Maharashtra, Bihar and even the south. Craftsmen here use hand tools only.

Earlier, the entire gold trading and jewellery shops were restricted to this bazaar.

Talking to Business Standard, Zila Swarankar Sang President Ashwani Kumar, whose family has been in the field for six generations, said, "The high prices of gold have crippled our sales. In the marriage season, the daily sale of gold jewellery in this market is 10-15 kg. But, due to the high prices, the market is witnessing a 30-35 per cent decline in sales. Moreover, tough competition poses a problem. In the 1990s there were 45-50 shops in the bazaar; now there are 170-200. When we consider the entire city, there are 1,500-1,800 shops, employing 65,000-70,000 workers."

Kumar said the daily consumption of gold jewellery in Amritsar in the peak season was 30-35 kg. Sources say it is the availability of cheap labour that has made Amritsar one of the biggest gold markets after Mumbai and Delhi.

A jeweller said, "An additional problem which traditional shops face is glitzy outfits set up by rich businessmen, following the repeal of the Gold Control Act a decade ago. The unexpected turn of the events has forced many goldsmiths to take to other professions. With rising prices of gold jewellery and decreasing profits, more and more jewellers are shifting to manufacturing artificial jewellery.