Mumbai, Feb 1 (IANS): The Indian gold and diamond industry reacted cautiously to the Union Budget 2023-2024 proposals for the critical sector and rued that they expected "more" from Finance Minister Nirmala Sitharaman.

World Gold Council Regional CEO Somasundaram P.R. said that while the reduction in custom duty on gold from 12.5 per cent to 10 per cent is a right step, the hike in Agriculture Infrastructure & Development Cess has brought the overall duty to 15 per cent, same as before.

"High taxes will impede efforts to make gold an asset class, particularly at a time when gold prices have risen globally... the thriving grey market has diluted efforts to reduce cash transactions and penalises organised and compliant players. On a positive note, the announcement that conversion of physical gold to Electronic Gold Receipt will not attract any capital gains will provide an overall digital boost to the industry and promote investments in electronic equivalent of gold. Directionally, this year's budget can be considered positive for the industry."

All India Gem & Jewelery Domestic Council Chairman Saiyam Mehra said the industry's critical concerns have not been addressed, like EMI on jewelery, relief in capital gains tax, gold monetisation scheme, particularly the big expectation of a reduction in gold custom duty which has severely hampered the industry, encouraged smuggling and the grey market.

Mehra said that the silver dore bars custom duty has been brought at par with Gold and platinum which will adversely affect the masses, and the GJC will raised this issue with Sitharaman during her Mumbai visit on Saturday.

Chairman of Malabar Gold & Diamonds M.P. Ahammed said that the decision to promote lab-grown diamonds would boost exports, though the hike in duty for silver will push up the prices of this precious metal.

All India Gem & Jewellery Domestic Council Vice-Chairman Rajesh Rokde said the industry is deprived of several key needs like EMI on gold jewellery, and slashing the credit card commission levied by banks, especially since the industry plays a very pivotal role in the nation's GDP.