Blog - Impact of Ban on Rs 1000 & Rs 500 notes on the Jewellery Market!

Impact of Ban on Rs 1000 & Rs 500 notes on the Jewellery Market!

26 Nov 2016

By Paliwal Jewelers

On November 10, when government of India declared Rs 500 & Rs 1000 notes as invalid, it created a rigorous impact on the Jewellery market and real estate too. It is a step in the right direction to remove corruption & demolish black money. Avaricious citizen who hide their money in order to save it from going to government in form of income tax can no longer keep it with them, in form of neither gold jewellery nor real estate. Most of the people use physical assets like jewellery to hide their black money but now they can buy jewellery only by using new currency i.e. white money. It has been traditional practice in India to lock black money in gold & also preferred as a financial saving.

There have been affirmative as well as off-putting effects of the ban which are a follows.

Jewellery purchase is possible only through white money.

There is shortage of new currency in the market as at a time only one citizen can withdraw Rs 24,000 in a week. This has significantly increased online jewellery shopping in India because people can easily pay more than 24,000 with smartcards, e-cash and other electronic payment medium. They don’t need to face the huge crowd at banks and ATMs to withdraw money. Another significant aid of jewelry online Indiais that customer can buy jewellery that cost higher than Rs 24,000.

Transparency in jewellery zone

Jewelers who did not report bills in order to hide their profits and fill less income tax return now have to document every transaction as a bill; they cannot keep black money with them. Therefore the banning of higher currency brings transparency in jewellery sector.

Reduction in Jewellery Rates

India is the largest consumer of gold and imports around 900-1000 tones, therefore most of the experts and industrialist asserts that the gold rates will decrease. In the past few days the gold rate (24 carat)has reduced from Rs 3,175 on 13 November to Rs 3,060 on 23 November.

Rise in Online Jewellery

Some people even in the world of high technology are apprehensive about making online transaction & therefore ignore shopping jewellery online in India. But in the current arena people can buy heavy gold jewellery only through online shopping. Therefore after having a real experience of online purchase they now know that there is no risk or difficulty to shop precious jewellery on the internet. Now they discern that to buy jewellery online India is easy and exciting with easy money back return policy which they are not offered at offline stores.

Uneducated population suffer

India is a developing country & still large fraction of India is illiterate. They cannot shop from online jewelry stores in India. They do not have enough knowledge about how to shop products from websites; therefore they are not able to buy jewellery because they do not have enough amount of new currency.