India’s NBFC lenders, many of whom have struggled to raise funds from the markets in recent months, have pulled back on loan growth amid tighter liquidity conditions. Fresh sanctions across categories like auto, unsecured business loans and property loans fell in the January-March 2019 period. There was, however, a notable exemption. Disbursements of gold loans doubled over the year-ago period, even as total disbursements contracted by a third.
The decision to raise import duty on gold in the Union Budget was taken after a careful consideration, including its likely impact on smuggling of the yellow metal, a top government official said. Finance Minister Nirmala Sitharaman hiked import duty on gold and other precious metals in the Budget to 12.5 percent from 10 percent.
All India Gem and Jewellery Domestic Council (GJC) said it is planning to meet the Indian Banks Association (IBA) after Budget 2019, to find a solution over the liquidity crunch the industry is facing following lenders refusal to extend loans. GJC has also urged the government for exemption from Capital Gain as per Section 54F of the Income Tax Act 1961, extended to the gems and jewellery industry. GJC also urged that the limit of Rs 10,000 per day be increased to Rs 1,00,000 per day on revenue expenditure under section 40A of the Income tax Act.