India’s jewellery industry is estimated at Rs 4,15,000 crore. The industry employs 2.5-3 million workers. A joint study by the National Skill Development Corporation and KPMG estimated in 2015 that the sector would create 3.59 million additional jobs by 2022.
The industry faced a downturn earlier after the global economic crisis in 2008 during which it lost 15-20 per cent of its skilled and unskilled workers to the textiles, agriculture and allied sectors.
“Jewellers have started reducing variable payments to workers but retrenchment is on hold awaiting changes in taxes and easier rules for cash transactions,” an industry source said. Earlier this year, the government lowered the limit for quoting permanent account numbers during jewellery purchases to Rs 2,00,000.
“There is no likelihood of jewellery demand reviving for a couple of months. Jewellers do not have money to pay artisans,” said Prithviraj Kothari, managing director, RiddiSiddhi Bullions, a bullion dealer in Zaveri Bazaar here.
Workers have started opening bank accounts but the cash withdrawal limit of Rs 24,000 a week is inadequate for contractors to continue business.
“Sellers are also not able to monetise their gold because jewellers are paying in cheques that cannot be cashed due to the weekly withdrawal limit,” said Ranka Fatechand Nagraj, president, Maharashtra Rajya Sarafa Mahamandal, a Pune-based jewellers’ body. Ranka expects 10 per cent job cuts in the next two months.