Hallmarking of gold as quality assurance stuck in logjam

By Rana Ajit, IANS
Sunday, October 24, 2010

NEW DELHI - All that glitters is gold, or is it really so? A quality benchmark survey has revealed 15-20 percent adulteration in 22-carat gold jewellery, but the government’s scheme for mandatory hallmarking of gold ornaments as an assurance of quality is stuck in legal wrangles for a decade now.

A lawmakers panel which is examining the issue is concerned over the delay in implementing the scheme, which was first mooted in 2000 and was proposed to be implemented from January 2008 in a phased manner.

“The committee is deeply concerned to note the delay in implementation of the scheme for mandatory hallmarking of gold jewellery,” said a lawmakers’ panel.

The scheme was to be implemented first in four metros and then extended to the rest of the country, said the parliamentary panel attached to the ministry of consumer affairs, food and public distribution in its latest report to parliament.

Questioned on the delay in implementation of the scheme, ministry secretary Rajiv Aggrawal explained that it required amendment to the Bureau of Indian Standards (BIS) Act, 1986.

The amendment was needed to empower the government to make hallmarking or certification of any product or process mandatory, simply on the grounds of public interest, he said.

Ssection 14 of the BIS Act provides for mandatory hallmarking or certification of any industrial product or process in public interest but only if the industry figures in a scheduled list of another law - the Industries Development and Regulation Act, 1951, he explained.

He said that though the industry producing or processing raw gold and silver out of minerals figures in the schedule, the profession of goldsmiths who process gold into jewellery is not on that list.

The law ministry has advised the consumers affairs ministry to seek amendment to the BIS Act to have it delinked from the provisions of the Industries Development and Regulation Act, 1951, Aggarwal told the panel on July 21.

As the consumer affairs ministry initiated its proposal on the advice of the law ministry and sent it for cabinet approval after due legal vetting, the cabinet secretary asked it to consult the ministries of finance, commerce and industry also on the issue, he said.

After the consumer affairs ministry told the cabinet secretary that one round of inter-ministerial consultation has already been held on the issue earlier, the ministry was told to discuss the issue afresh owing to a long gap since the earlier round.

Accordingly, the consumer affairs ministry was following the cabinet secretary’s instruction, the panel was told.

At this, the lawmakers’ panel said: “Even the people of small towns and villages invest their hard earned savings in gold jewellery as a hedge against inflation and difficult times.”

“All such consumers rightly deserve to get insurance of their investment in gold, which is possible only if the hallmarking of gold jewellery is made mandatory,” said the panel.

“Unless hallmarking is made mandatory, the scheme will not have the desired result of protecting the consumers’ interest, besides promoting export competitiveness and developing India as a leading gold market in the world,” the panel said.

“BIS market surveys in 2002 revealed a 10-15 percent adulteration in 22-carat jewellery which at today’s gold prices, will be estimated to Rs.20,000 crore per annum of loss to the consumers. The matter thus deserves serious consideration,” the panel said in its report tabled in parliament Aug 30.

The panel members said they “strongly recommend to the government to take up the matter with utmost seriousness and finalise the modalities of the bill for its early introduction in parliament.”

Asked about the possibility of the consumer affairs ministry introducing the relevant bill in the winter session of parliament, ministry director G.P. Pillai told IANS: “It’s doubtful. The law ministry is still vetting a fresh proposal on the issue that we made after inter-ministerial consultations.”

(Rana Ajit can be contacted at rana.ajit@ians.in)

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