Govt to set up 500 centres to monitor purity of gold

New Delhi, Sep 2 (UNI) The Bureau of Indian Standards (BIS) will set up 500 Surveillance Centres in all major cities of the country to monitor the quality of gold and silver jewellery in a bid to ensure their purity levels, Company Affairs Minister P C Gupta today said.

Inaugurating the 2nd International Gold Summit here, the Minister said, ''It had come to the notice of the government that jewellers across the country have been selling off sub standard jewelleries to millions of gullible consumers without fear of being caught.'' ''To ensure that this phenomenon does not recur, the Department of Company Affairs has asked the BIS to set up about 500 surveillance centers all over the country so that no cheating takes place for small investors in gold and silver, he added.

''These centers would shortly become operational in major metropolis and other cities in which gold and silver are traded,'' the minister said.

Following raids from BIS inspectors, the government has found out that jewellers from various shops in Hyderabad, Kolkata and Jaipur have been selling sub-standard jewellery, Mr Gupta said, adding it is in view of this that the monetary mechanism is being set up to ensure that no impure quality of jewellery is sold out.

''The nationwide BIS operations showed that 88 per cent of the shops, whose jewellery was tested by the inspectors failed to,'' follow purity levels.

''These kinds of distortions are not going to be tolerated said the minister said.

The Department of Company affairs would impose heavy penalities against those firms that violate the corporate governance rule to cheat small investors, he announced.

The minimum penality for violating corporate governance rule would be Rs 1 lakh and its maximum ceiling would be Rs 5 lakh, he added.

Referring to the issue of further liberalisation of bullion trade, Mr Gupta said the government would shortly take steps to consider the demand of industry for bullion trade.

Speaking on the occasion, MCX MD and CEO Jignesh Shah said the gold trading on an average had reached about Rs 6,500 crores a day which was Rs 3,500 crore a couple of months ago. This is beyond the daily trading limit of Rs 3,500 crore of Indian stock exchanges which is not beyond Rs 3,500 crore.

Therefore, he said further liberalisation of bullion is in the interest of India and that government should not delay any longer.

Gem and Jewellery Export Promotion Council Chairman Bakul R Mehta said out of 4,036 tonnes of gold 2,712 tonnes were used for jewellery fabrication in 2005.

The total mine production in India is estimated at 3.4 tonnes, 80 per cent of which is used for jewellery febrication and 10 per cent for industrial purposes while 5 per cent for investors.

He sought duty free import of gold and also urged the government to allow direct import of bullion to all commercial banks, star trading houses, gems and jewellery importers or exporters having IEC number.

As per estimates made by the industry chamber Assocham, daily trading in gold and silver would reach a level of Rs 20,000 crore in next 2-3 years, Assocham President Anil K Agarwal said, and demanded that the industry should be completely de-regulated.

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