The Election Commission’s restriction on cash transaction and transportation of gold has severely hit bullion trade in Tiruchi and neighbouring areas.
As per EC restrictions on transport of cash, individuals can carry amounts to a maximum of ₹50,000 without valid documents. If they carry more than the permitted limit, flying squads and static surveillance teams (SST) seize the cash and inform income tax officials to ascertain the source of money. The cash carriers will have to produce evidence to get back the money.
Besides targeting illegal transportation of money to check distribution of cash for votes, officials carry out random checks of vehicles transporting various commodities. There are instances of officials seizing gold ornaments from traders for want of proper documents.
Days after the model code of conduct came into force from the second week of March, officials in Karur seized 94 kg of gold ornaments worth ₹5.6 crore from a van proceeding to Salem from Madurai. Later, it turned out to be a genuine transportation of gold by a courier company to a jewellery mart in Salem.
The stringent measures, gold merchants say, besides procuring fresh designs from gold and silver makers, have affected business to a great extent. The impact is clearly felt among medium and small-time bullion traders on Big Bazaar Street, which houses about 300 medium and small jewel marts. Jewellers in Ariyalur too feel the pinch.
“We see 40% dip in sale since the second week of March. Most people, particularly from rural areas, prefer cash transactions. Fearing enquiries, many customers are reluctant to purchase gold now. It has severely hit the business of gold merchants,” says K.R. Senthil Kumar, a jeweller in Ariyalur.
The dip in business has had cascading effects such as accumulation of interest on borrowings, delay in repayment to suppliers and other overheads, he adds.
However, business in big jewellery houses seems to have remain unaffected by the cash curb. Big players in the trade in Tiruchi say business is largely as usual.
“Most of our customers prefer debit or credit card transactions. There are no restrictions for genuine purchase of gold for own use and marriages. But the restrictions might have hit small traders,” says a senior employee of a gold chain mart in Tiruchi.