Scrapping of 80:20 rule a very positive step: Ajay Bodke

In a chat with ET Now, Ajay Bodke, Head-Investment Strategist & Advisory, Prabhudas Lilladher, shares his views on the gold import norms. Edited Excerpts:

ET Now: The government has eased gold import norms. The 80:20 import scheme has been scrapped. What is your view on this news? Does it materially impact any of the jewellery companies?

Ajay Bodke: The main advantages that these companies would have is that the balance sheets would see a significant improvement. The cost of gold would come down substantially. That would aid the bottom line performance of these companies. From the macro perspective, a large amount of illicit smuggling of gold was happening because of this 80:20 rule as well as the procedural hassles that these companies were facing in terms of importing gold. That will clearly be a thing of the past. The government’s revenues also could see a bump up due to the 10 per cent customs duty that is there on the legit imports of gold. So overall, the government has taken a very positive step in terms of scrapping this 80:20 rule which will be very positive for the sector as a whole.