Govt to make hallmarking of gold mandatory by ’08

NEW DELHI: Look hard before buying gold jewellery this Diwali. Chances are that nine out of ten would be made of impure gold. And if you are really unlucky, then almost half the metal used in your “gold” ornament may not be the precious metal that you fancy.

To tackle the problem of increased adulteration which is a fallout of rising gold prices, the government is planning to make hallmarking of gold — an official guarantee of purity — mandatory by ‘08 at least in metros.

In order to create adequate infrastructure, the Centre is doling out one-time financial assistance to set up hallmarking centres in 35 select districts.

As per a market survey carried out by the Bureau of Indian Standards (BIS) and Assocham in 16 cities this year, 90.7% of the samples tested were found short in purity with average shortfall of 13.44% and highest shortage of 44.66%. In ‘01, about 89.2% of the samples tested were found impure and the level of impurity was much lower with an average shortfall of 11.1% and highest shortfall of 38.6%.

Speaking to ET, MMTC chairman and managing director Sanjiv Batra, who is a part of the ministry of consumer affairs’ committee on gold, said, “The sharp rise in the price of gold is an important reason behind the increase in gold impurity.” He added the process initiated by the consumer affairs ministry to make hallmarking of gold mandatory would play an important role in checking adulteration.

Currently, there are only 39 recognised hallmarking centres across the country, including MMTC’s centre in the Capital. “The consumer affairs ministry wants the number of such centres to go up before hallmarking is made mandatory. The idea is to enforce it in phases with the first phase covering metros and other identified districts where gold purchase is high,” Mr Batra said.

A scheme of setting up of assaying and hallmarking centres for gold jewellery in 35 select districts on a pilot basis with Central assistance of 15% of cost of machinery has been approved by the government. The scheme is subject to a cap of Rs 15 lakh per centre. MMTC is in the process of setting up 10 new centres all over the country. Mr Batra said while two centres in Ahemedabad and Jaipur will be operational before the end of the year, one centre in Kolkata will soon follow.