BWI: Views of RSBL MD - Mr. Prithviraj Kothari on Indian Budget 2016 & Importance of GST for Bullion Sector

Source : Riddisiddhi Bullions Ltd. Friday, February 26, 2016 5:02PM IST (11:32AM GMT)   Views of RSBL MD - Mr. Prithviraj Kothari on Indian Budget 2016 & Importance of GST for Bullion Sector   Mumbai, Maharashtra, India ​The transcript of the video is as follows:   Anchor: How significant is goods and services tax (GST) for bullion industry? Mr. Kothari:  Implementation of GST should be expedited for all round growth of our economy including supply chain, sourcing and distribution decisions, inventory cost, cash flows, pricing policy, accounting system and transactions management. The government should levy on bullion flat GST which would replace most indirect taxes like small local taxes, LBT, octroi etc currently in place. Not only that, there will be an ease in documentation too.  Anchor: Government of India has focused reducing import of gold. Has time come to focus on gold mining in India? Mr. Kothari: India is rich in mineral resources. But, because of poor research and development (R&D), gold mining has been at bay. Despite huge resources, total production from domestic mines constitutes between 1-3 tonnes out of India’s estimated consumption of 1000 tonnes. On the other hand, China boosted its gold refining business after allow single-window clearance along with fiscal and infrastructure incentives which has put the industry on fast track. China reported total gold production at 451.8 tonnes in 2014, up by 5-52 per cent from the previous year, and become the largest gold producer in the world eighth year consecutively. India needs to focus on R&D in an effective way to reduce dependence on import and therefore, foreign direct investment (FDI) in R&D should be expedited. Moreover there are lot of issues with mining like the local MLA issue, local population of a particular area concerns etc. Due to these issues, mining has lot of limitations.   Anchor: With such issues, mining will remain just a dream for India. Mr. Kothari: See, today somebody invests and starts mining and then people come forward with a stay on it. So who will invest money in India? The government should provide single window, frame only one policy that clearing, environment, all will be issued by the central government. State government will have no say. The emerging revenue issues should be decided state versus centre.   Anchor: Despite repeated request, the government has not yet reduced import duty on gold. Do you expect the same in the upcoming budget? Mr. Kothari:  Bullion dealers and jewellery manufacturers have sent several representations to the government for reduction in import duty from the existing 10% to 2% to provide a fillip to the domestic jewellery sector. Domestic jewellery buyers stayed away from fresh purchase since long amid expectations of cut in import duty. Anchor: You have said earlier something that commodity exchanges are the best tools for hedging the price risk? Is the current system of trade sufficient or the government should do something else? Mr. Kothari:   See, in the last conference we held, our Shaktikant Dasji had said that there should be a bullion bank. Indian Bullion Jewellers Association, I and others together worked out on the concept and have tied-up with BSE to establish an Exchange and Bullion Bank, subject to RBI clarification. So, if these things happen, the disparity the people have in the market today will reduce very much. According to me, if the bullion bank is there, the prevalent difference of parity and disparity (will be reduced to great extent). Sometimes, the premium becomes 13 Dollars, 20 Dollars, 30 Dollars and sometimes even minus 30 Dollars. So, during the minus period we cannot re-export them. So, in my opinion, the government should open a bullion bank here wherein if you deposit gold, you will also get benefit over that and (if) you want to re-export that, you can re-export through the Re-export Bank. Thus, to great extent, there would be support to the economy and in a way, the economy will boom.   Anchor: Take intercepts from your last interview, you had stated that Gold Bond and Monetization scheme are very good initiatives from the government. But the stats portray a different picture. What the government should adopt to make it more successful? Mr. Kothari:  See, the initiatives by the government are very good. Until today, no government has taken such initiatives. One problem that is hindering its success is the gold deposit scheme. Today gold is lying in every household. If you ask them its sources it is very difficult for them to provide as it could be lying for ten years, twenty years, thirty years, forty years, since their grandparents time. Thus the government should do something like, you may say, a concession should be given up to 500 grams of deposit. Second emerging issue is that there of the jewellery. When the jewellery is melted there is a loss in the elements. Some steps would have to be taken to take into account the loss issue. With respect to the sovereign bond scheme, liquidity in the market is tight. Otherwise, the scheme is very good wherein 2.75% interest is also available. But with it, currently the market conditions aren’t favoring it. For example, the prevailing price was 27,000 and price of that sovereign bond was 26,000, even in that some 2700 plus crores rupees came. Thus, with this it is clearly visible that there is very much liquidity crisis in the market. Anchor: To sum it up, any additional points to expect from the government with respect to BUDGET 2016? Mr. Kothari: I hope that the ban on gold trading levied by the government on SEZ (Special Economic Zone) should be lifted. It would boost the exports in a major way. I hope that bullion bank and bullion exchange only for gold wherein the government itself would borrow from and lend into. Anchor: Thank you so much Sir for your time. If you could throw some light on the Trade range; for Gold price during the Budget week and thereafter? Mr. Kothari: With the geopolitical tensions and the economies faltering, I do see a good support for the Gold prices for a while. USD 1070 should act as a strong support while USD 1300 should act as a strong resistance. In rupee terms INR 25,500 to INR 33000 should be a trade range to look for in Gold prices. Thank you! Profile Note: Mr. Prithviraj Saremal Kothari is a renowned name in the Gold Silver and Platinum Bullion Industry. He has been instrumental in the development of the bullion market in India. A commerce graduate from the Mumbai University, Mr. Kothari has been in the family business of gold trading since over 30 years and counting. As one of the promoters, he has almost single handedly steered RiddiSiddhi Bullions Limited (RSBL) to the top 10 unlisted public companies in India in terms of sales turnover as per BS1000. He has given some crucial advice to the Indian Government in helping them make the bullion markets more organized. He has been the pioneer in introducing 'Instant International price based INR denominated bullion trading in India'. He is also on the advisory committee of the Multi-Commodity Exchange of India (MCX) and has advised MCX and NCDEX for devising successful gold and silver contracts. In the past, He had served as the President of the Bombay Bullion Association (BBA). As a president, he had played a crucial role in promoting BBA in the international markets. He has played a vital role in the introduction of gold ETFs in India. Under his vision, RSBL has successfully launched India's first and only electronic over the counter bullion trading system, RSBL SPOT. He has been felicitated with the prestigious Jain Ratna award twice, once by Honorable President of India, Smt. Pratibhadevi Patil on 13th March, 2012 and second time by Honorable Chief Minister of Maharashtra Mr. Prithviraj Chauhan on 23rd April, 2013 for contributing remarkably towards the well being and upbringing of the Jain fraternity. Facebook: https://www.facebook.com/prithviraj.kothari Twitter: https://twitter.com/prithvirajrsbl Blogger: http://riddisiddhibullionsltd.blogspot.in/ Website: http://www.rsbl.co.in/ Youtube: https://www.youtube.com/user/PrithvirajKothari Google+ URL: http://www.google.com/+PrithvirajKothari Video Caption: Mr. Prithviraj Kothari, MD – RSBL, on Indian Budget 2016 & Importance of GST for Bullion sector   Media Contact Details Nirmal Phophalia, President Newsmen Media Consultants, ,+91-9870003933 , newsmenpr@gmail.com   To ensure that you continue to receive email from Business Wire India in your inbox, please add businesswireindia.com to your Address Book or Safe List.   To submit a press release, click here. 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