Gandhi Road, Ongole’s main jewellery market, sees thin crowds nowadays in the wake of scrapping of high-value notes by the Centre.
The footfalls to gold shops has dropped to single digit from about 50 since the commencement of the marriage season since Diwali as a majority of sales are only through cash. Only some big corporate jewellery stores, which have come into existence of late in the city, still transact taking payments from customers either by way of cheque or plastic cards.
People with stocks of scrapped notes make enquiries, but refrain from making any purchases. Many smaller players who cater to the needs of rural people are completely out of business, say some leading gold shop owners here.
“We have been expecting a brisk sale for six months from now. But the demonetisation has put paid to our hopes,” laments Andhra Pradesh Gold Merchants Association state convener Thata Prasad in a conversation with The Hindu here. Only those with the dire need for purchasing gold for special occasions do so with either cheques or plastic cards, he explains. The silver lining for the jewellery industry is that people from now will feel safe putting their money on gold and precious stones than currency notes in the medium to long run, thanks to demonetisation.
“In the short run, the bullion market likely to see a correction,” he opines, adding that “our business has come to almost standstill as we have stopped accepting scrapped Rs.500 and Rs. 1,000 rupee notes from November 8.”
The jewellers had already lost business for three months following their protest against imposition of excise duty on gold and diamond jewellery by the Centre and making mandatory PAN card for purchases worth Rs.2 lakh, points out its Ongole unit vice-president V. Venkateswarlu.
At least 60 per cent of the jewellery shops here will have to down the shutters once and for all if the Centre does not ensure replacement of notes expeditiously as almost 97 per cent of the business is done with cash as the industry is unorganised, laments its treasurer P. Ramesh Kumar.
Expressing concern over the fall in business, Tata Goldplus branch manager Boyapati Naveen Chowdhary wants the Centre to enhance the credit limit for each day to up to Rs.5 lakh to enable customers purchase gold ornaments.
“No big sale could be clinched since November 9. Only some small purchases like studs, ear rings, nose studs are made,” he adds.
