This will have a multiplier effect and result in increasing demand for gems and jewellery which will have a vital and positive impact on output, employment, value addition and indirect tax collections, noted the study titled 'Gems & jewellery industry: Contributing to 'Make in India,' conducted by The Associated Chambers of Commerce and Industry of India (ASSOCHAM) jointly with Thought Arbitrage Research Institute (TARI).
Overall exports from gems and jewellery sector in India during the first six months of fiscal 2015-16 stood at $19.22 billion and registered a decline of 5.59 per cent over the $20.3 billion exported in the same period last year.
Gems and jewellery sector might register a decline of about 15 per cent in wake of severe economic downturn in major export markets of China and the Eurozone, said Mr D.S. Rawat.
Granting industry status can give a fillip to investments and bring down costs of operation in gems and jewellery sector, besides it will help build trust and faith in Indian brands in the global markets and in achieving goals of Make in India, said Mr Rawat.
Modernisation of labour laws, requirement of more export-oriented economic zones, establishment of a gold board, ensuring access to better financing, relaxation of certain taxation laws, segregation of investment and consumption demand, setting up a gold tourism circuit are certain key areas focus on which can help in reviving the G&J sector in India, suggested the ASSOCHAM-TARI study.
Growth in gems and jewellery sector can be a single panacea to all problems of Indian economy owing to strong backward linkages of the sector with ancillary industries, noted the study.
It is most imperative for the government to assess the potential impact of regulations on employment, exports and value addition before imposing various restrictions on the gems and jewellery sector.
Planned and systematic efforts by the government like removal of barriers stifling growth of the gems and jewellery sector and introduction of policy initiatives to boost growth are significant to sustain the potential of this sector.
The ASSOCHAM-TARI study also pointed out that young workers are shunning the gems and jewellery sector and moving to other lucrative industries in the manufacturing sector.
The average salary in Indian gems and jewellery sector at Rs 2.52 lakh per annum is perhaps the lowest amid manufacturing industries like pharmaceuticals (Rs 5.09 lakh), capital goods (Rs 4.94 lakh), electronics (Rs 4.43 lakh), chemical (Rs 3.97 lakh), automotive (Rs 3.77 lakh), construction material (Rs 2.88 lakh), metal and metal products (Rs 2.54 lakh), highlighted the study. Inadequate working conditions and limited compliance with health and safety standards have also led to poor worker interest in this sector, said the study.
Unorganised players and small-scale enterprises are not known to use cutting edge technology and high quality materials in their manufacturing processes, this is another major reason crippling growth of gems and jewellery sector in India.
Systematic and collective investments in skill development through increased training and manpower development programs is the need of the hour, the study noted.
An increase of Rs 1 in final demand in gems and jewellery can lead to an increase of overall output of the economy by about three times.
Similarly, employment in Indian economy can increase by more than five times the rise in employment within the gems and jewellery sector, besides value addition and indirect tax collections in the economy can also increase by more than four times and three times respectively.
Penetration of large retailers in the gems and jewellery sector will provide required growth impetus, open new opportunities of evolution and progress, attract investments, bring down costs of operation and increase global reach of domestic brands.
Highlighting the role of sector in the Prime Minister's ambitious 'Make in India,' initiative, the study said that gems and jewellery sector can help achieve targets set under the programme through focus on innovation, creativity, new ways of marketing and transparency.
Considering that sustainable growth of any industry needs continuous supply of new talent with skills and ground-breaking ideas, the ASSOCHAM-TARI study has suggested the need to substitute manual methods of cutting, polishing, manufacturing and designing of gems and jewellery with high-end machines and software by imparting practical training to the youth in use of modern techniques prevalent globally.
Shortage of skilled labour, use of primitive technology, poor wages, fall of rupee against major currencies, ever-changing consumer behaviour, absence of a single-dedicated association, lower value addition, limited innovation and others are certain key challenges being faced by the gems and jewellery sector in India.
Powered by Capital Market - Live News
