Rashi Aditi Ghosh/ZRG
Indians’ never quenching love and lust for gold is common knowledge. It is now driving them to commit more and more custom offences despite more liberal set of norms for importing gold. The skyrocketing gold prices too haven’t helped their cause.
A Zee Research Group (ZRG) analysis of finance ministry data reveals that the numbers of Indians involved and the quantity of seized gold jewellery at various airports/planes in the India is increasing every year since 2008-2009. While 90 persons were arrested for committing custom offences of gold jewellery at airports in 2008-2009, the number has sharply increased to 188 in 2011-2012 (as on February 2012). Similarly, the quantity of gold jewellery seized at various Indian airports has grown from 28.2 Kilograms in 2008-2009 to 114.2 Kilograms in 2011-2012.
According to Customs Act, a passenger returning with gold after a short trip must pay 36 per cent duty. If a passenger returns from a trip after more than six months, 10 per cent duty is charged on gold. A male passenger returning after more than one year can carry gold worth Rs 10,000 and a woman worth Rs 20,000, duty free.
Explaining Indian inclination towards gold jewellery, Professor Pramod Kumar Sharma, a sociological expert on family, kinship and marriage issues from Indian Sociological Society, New Delhi says, “Traditionally, gold is traditionally very close to Indian hearts due to its utility. Starting from beauty quotient to asset building, gold is apt gifting and buying option for Indian families.”
Highlighting the economic aspect of gold’s cultural value, Naveen Mathur, associate director of commodities and currencies at Angel Broking, Mumbai says, “As estimated by World Gold Council, India’s strong cultural link with gold can be underlined by the fact that having a population of 1.2 billion the country holds about 20,000 tonnes of gold in the form of jewellery, coins and bars. Estimates also reveal that 60 percent of the gold demand is derived from the rural sector and farmers of India being the biggest consumers purchase it and use it as savings.”
ZRG analysis also shows that not only the commoners but many celebs like Bipasha Basu, Minissha Lamba, Ekta Kapoor, Katrina Kaif, Dia Mirza and Anushka Sharma have been reportedly detained at Indian airports for not declaring goods and jewellery but then let off soon after paying duty.
Talking on India’s recent trend of buying gold jewellery from abroad and then getting caught on the process of hiding it at the airports, D.K Joshi, chief economist at CRISIL says, “More Indians are buying gold jewellery from abroad due to the depreciation of Indian money. Indians prefer buying gold jewellery from international markets as they offer them jewellery with low making chargers in comparison to Indian markets.”
India’s dependency on gold for fulfilling their traditional rituals is so high that many jewellers are duping Indians by selling adulterated gold jewellery.
Based on the prescribed standard on purity of gold formulated under IS 1417:1999 Bureau of Indian Standards (BIS) has taken action against some of the licensed jewelers. Since 2010-2011, 80 jewellers across India have been marked as defaulters.
Details furnished on the market surveillance conducted by BIS shows that Gujarat, Andhra Pradesh and Kerala are the states with highest number of defaulter jewellers that were selling sub-standard gold jewellery.
Reasoning the demand of gold and its inflating rates, Mathur from Angel broking adds, “To temper the demand for gold on various occasions and to manage the inflating pocket expenses, Indian people buy gold of low carats or less purity.”