Mandatory Gold Hallmarking Norms In India – Economics – Free PDF Download

CURRENT AFFAIR 

• The Department of Consumer Affairs will release the notification regarding mandatory hallmarking of Gold jewellery & artefacts in India
• Earlier, it was optional for the jewellers and thus only 40% of gold jewellery was getting hallmarked
• Gold Hallmarking is a purity certification which started in 2000

 TOPIC 

• Prelims level : BIS Hallmark
• Mains level : Ensuring gold purity and standardisation

Gold Hallmarking 

• BIS is running a hallmarking scheme for gold jewelry since April 2000
• The BIS Act 2016 has enabling provisions under Section 14 & Section 16 for mandatory hallmarking of Gold jewellery & artefacts by the Central Government
• This will make it compulsory for all the jewellers selling gold jewellery and artefacts to register with BIS and sell only hallmarked Gold jewellery and artefacts

 GOLD FRAUD

• Gold fraud can be in many forms like Not accurate karat, Colored paint, Less weight-age
• They can also be gold plated, heavy gold electroplate and gold filled
• Gold fraud are often ignored in India
• In the past, there have been instances where a person was fooled with fake gold and was lured to pay the original price for it
• In 2018, Times of India report mentioned, A gang of nine people pledged 2 Kg fake gold ornaments with five different banks

 HIGHLIGHTS 

• The notification will make hallmarking of gold jewellery mandatory from January 15, 2021
• The jewellers have been given one year time to register with the Bureau of Indian Standards (BIS) and clear their stocks if not hallmarked yet
• Hallmarked gold jewellery will be only in three grades – 14- carat, 18-carat and 22-carat instead of current availability of ten grades
• It will contain four marks: BIS mark, purity in carat, assay centre’s name and jewellers’ identification mark
• The rule is applicable only on sales by retailers and not to consumers
• However, it is available for consumers who want to get their old jewellery hallmarked
• Anybody found violating the provision, will have to pay a minimum fine of Rs 1 lakh or 5 times the price of the article
• The government had informed about these hallmarking norms to the World Trade Organisation (WTO), which will help exporters get to know the changes in advance in importing country like India
• India is the world’s largest importer of gold
• Annual imports of 700-800 tonne

 Current Scenario in India 

• Currently in India, only 28,849 jewellers have BIS registration
• According to World Gold Council, the gold import of India was 496.11 tonnes in 2019

 WHAT NEXT? 

• BIS has been running a hallmarking scheme for gold jewellery since April 2000 but hallmarking of gold is voluntary as of now.
• After the notification is issued, it will be compulsory for all jewellers selling gold jewellery and artefacts to register with BIS and sell only hallmarked gold jewellery and artefacts.

 RATIONALE 

• The mandatory hallmarking will protect the public against lower caratage and ensure consumers do not get cheated while buying gold ornaments.
• It will also help to get the purity as marked on the ornaments.
• It will bring in transparency and assure the consumers of quality.
• The new system will weed out anomalies and corruption in the system of manufacturing of jewellery.

 HALLMARKING CENTRES 

• According to the Department of Consumer Affairs, as on October 31, 2019, There are 877 assaying and hallmarking centres spread in 234 district locations across the country
• So far, 26,019 jewellers have taken BIS registration

Karat of Gold 

• The purity of gold is measured in karat of gold 100% pure gold is called 24 Karat gold.
• 22 Karat gold is 91.6% pure and hence the name 916 hallmark in gold jewelleries.

 HOW DOES GOLD IMPACT THE ECONOMY?

• Impact on the current account deficit
• FOREX
• Depreciation

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