Hallmarking runs at 30-40% capacity despite govt push

Published On: 01, Dec 2017 | Source: business-standard.com

While the central government is working to enforce mandatory of jewellery, the average hallmark centre is operating at only 30-40 per cent of its capacity.

There are 500 hallmark centres, each having the capacity to process 2,000 pieces a day (20 kg) of jewellery. They're located close to the jewellery manufacturing centres of Mumbai, Kolkata, Ahmedabad, Rajkot, Chennai, Coimbatore and Trissur, among others. Major cities have at least 10 centres.

The government is now offering Rs 20 -50 lakh subsidy for setting up an HM centre. The monthly operational expense being around Rs 2.5 lakh, a centre needs a business volume of at least 750 pieces a day to be viable. Such being the case, "we cannot expect HM centres to come up in smaller towns and villages, even when the subsidy amount looks attractive", said the spokesperson for the Indian Association of Centres (IAHC), mentioning the 30-40 per cent utilisation figure at which many operate.

Last week, the met officials at the Bureau of Indian Standards (BIS), which will be implementing the mandatory hallmark scheme; rules are being prepared. Sources said BIS plans to enforce it from June; six months will be given to the industry for disposal of jewellery not meeting the new rules. Jewellery articles of two gm and below are exempt from mandatory hallmarking; so is antique jewellery.

The government has also started working on allowing of 24-carat jewellery but a source close to the development said that if that is permitted along with mandatory than the implementation may be delayed.

Currently, jewellery is made in nine categories of caratage, from nine to 23 carat (37.4 to 95.6 fineness). In last week's meeting with BIS, minister had instructed that the hallmark logos indicate both caratage and fineness, as people in smaller places are familiar only with the former measure. The government has reduced the carat categories to three, of 14, 18 and 22 carats. BIS analysis presented in the meeting suggest 99 per cent of the done in the past two decades are of 22 carats.

IAHC has proposed to BIS to lower the licence fee, so that a small jeweller in a metro city need pay only Rs 2,500 to get one. Currently, only 25,000 jewellers have a BIS licence for selling hallmarked jewellery, a tenth of the trade. In major cities, most jewellers sell hallmarked jewellery but without a licence. A source adds that the majority of hallmarked jewellery is outside the BSI ambit, either for want of a licence or to avoid the required entire procedure or to not pay the BIS royalty or fee.