Coal Minister Jaiswal slams finance ministry over jewellery excise duty hike

Kanpur, Mar.26 (ANI): Union Coal Minister Sriprakash Jaiswal has criticised the Ministry of Finance's decision to raise the excise duty hike on jewellery announced in this year's budget.

Jaiswal made the comments while addressing jewellers in Kanpur, Uttar Pradesh, on Monday, and likened certain government departments to blood-sucking mosquitoes.

"The way mosquitoes suck blood during the night, in the same way there are a few departments in the country that also suck blood," he said.

Bullion and jewellery markets have strongly opposed the excise duty on unbranded jewellery and the doubling of import duty on gold.

The government's budget proposal imposes an excise duty of one percent on unbranded precious jewellery and doubles the customs duty on standard gold bars and coins to four percent.

The government also intends to charge two percent on jewellery purchases of more than 200,000 rupees.

Justifying his remarks later in the day in New Delhi, Jaiswal maintained that several government departments had failed to create an environment conducive for traders.

"During my speech in Kanpur, I had stated that a lot of officials in most of the departments create trouble for traders and suck their blood. It is unfortunate that they do such things," Jaiswal said.

Finance Minister Pranab Mukherjee dismissed Jaiswal's comments, saying he had clarified his stance.

"No, he told me. It is absolutely nothing. He has clarified it," said Mukherjee.

Despite the opposition, Mukherjee has refused to waive off any increases.

Traders have warned that the higher levies may lead to a rise in retail gold prices by over six percent in the country, which is seeking to rein in a widening current account deficit partly fuelled by record purchases in 2011.

India imports 900 tonnes of the yellow metal annually.

Gold imports alone contributed nearly 40 basis points in the 130 basis point widening of India's current account deficit between 2008 and 2011, according to research house Macquarie. (ANI)