Government Assistance for Gujarat Diamond Industry

The Government of Gujarat is expected to announce a special package to assist to local diamond firms, while the state’s Industries Minister, Saurabh Patel has appealed to India’s Minister of Commerce and Industry Kamal Nath, asking for additional relief for the state’s diamantaires.

A draft proposal from the Industries and Mines department to provide special assistance is awaiting final approval by the Government of Gujarat, according to local news reports.

The Indian state of Gujarat accounts for nearly 80 percent of the diamonds manufactured in the country. The industry was badly hit by the global financial crisis, and according to GJEPC estimates, nearly 65,000 jobs have already been lost because of it.

The proposed special assistance package is expected to cover new as well as existing industrial units in the gems and jewelry sector. Some of the measures include:

·        Credit link subsidy of 10 percent on eligible fixed capital investment subject to a ceiling of Rs 1.5 million (~$30,800). This subsidy will be in addition to any other support provided by the state and central governments.

·        Financial assistance for setting up hallmark certification and gem testing centers. A provision for assistance at 50 percent of the eligible fixed capital investment, limited to Rs 3.5 million (~$72,000), has been made for setting up a hallmark certification centre, and Rs 2.5 million (~$51,300) for gem testing centre.

·        Assistance to gems and jewelry units that maintain safety measures/equipment to protect workers against occupational health hazards. The assistance will be at 50 percent of the cost of safety measures/equipment, limited to Rs 500 ($10.27) per worker.

·        Support, including financial assistance through the Gujarat Infrastructure Development Board, for setting up a gems and jewelry park on the public-private partnership (PPP) model.

A committee comprising government officials and industry representatives is proposed to consider the proposals.

Meanwhile, the state government has also asked the central government to implement a liberal credit policy through the Reserve Bank of India and financial institutes to overcome the ongoing credit crunch, and waiver or extend the duration for levying penalty for delaying the export obligation.