Gold - India is sold on it.
From 65 tonnes in 1982, our annual consumption of the precious metal had shot up to as much as 900-950 tonnes in recent times.
According to the World Gold Council, a mighty 75% of this - (670-720 tonnes) - is fuelled by jewellery demand.
But while we buy gold in large quantities, do we buy it with due care? Here's a list of questions every gold buyer must ask ahead of purchasing gold.
Is the gold BIS hallmarked?
To say that India's gold business is far from transparent would be stating the obvious. While some change is sweeping in, customers still need to be on their guard.
The main issue is the lack of a mandatory seal guaranteeing the purity of gold. So jewellers in India can still pass off inferior quality jewellery (with a higher percentage of impurities) as 22-carat jewellery.
This makes it even more imperative for you to ensure the gold you are buying is from a BIS (Bureau of Indian Standards) hallmarked jeweller.
Of even greater importance is to ensure that the ornament you buy carries the BIS hallmark.
The complete list of hallmarked jewellers - gold and silver - is put up here.
In case you are not able to access the list and cross-check, you can contact BIS here.
BIS currently has a list of 369 recognised hallmarking centres with the list of the contact persons put up on their site. These centres can be contacted in case you have any issues with the hallmarking at any of the approved showrooms.
The issue within the main issue - the presence of too many jewellery shops and too much gold to check for these 369 hallmarking centres.
Tamil Nadu, India's largest market for gold jewellery, for instance, has only 58 centres to verify the genuineness of the purity of the about 250 tonnes of gold sold by over 1000 jewellery retailers in the city every year.
But with surprise checks allowed and cancellation of licenses of BIS-hallmarked showrooms among the punitive measures, a BIS hallmark sign still remains the benchmark you need to insist upon.
Buyers beware. The lack of BIS-hallmark-certified jewellery is particularly rampant in rural India, which accounts for 60-65% of our annual jewellery consumption. So even gold is cheaper in a smaller town or your village, don't buy it unless it is hallmarked.
Check the per gram price of gold
Always check the per gram price of gold ahead of your purchase. The means of arriving at it vary from city to city and are decided by various associations of gold jewellers. The biggest jewellers almost always sell at the same rate.
Make sure you are checking rates on a reliable website ahead of purchase. Sify.com has gold rates from India's major cities sourced from the major bullion organisers in the cities or from the reputed jewellers there.
Another way of ensuring that the per gram price of gold is reliable is by checking in more than one famous showroom.
How much gold are you really getting?
Gold sellers have an age-old trick and it has thrived even in the boom years. They complicate the pricing.
Allow us to explain:
On top of the per gram price, you have to pay for wastage (which varies from ornament to ornament and the mechanism of calculating which is a mystery only the jeweller can solve, but won't), and additionally, making charges too, in some instances. Post your decision to settle on a piece, making charges or a percentage of the wastage disappears from the pricing chart, but that hasn't simplified the picture, has it?
So a better way of simplifying it all would be: Find out how much gold you actually get in hand for the price you are paying.
For example, if the final price is Rs 30000 and you get a 10 gm chain in hand - you have essentially paid Rs 3000 per gram. Check the actual per gram rate on the day and see how much more you will end up paying. If your heart is still in the deal post this calculation, only then go ahead.
Check on buy-back terms too
Also, check and see what your jeweller is willing to offer you if you were to return the gold jewellery at a later date and exchange it for a more contemporary design. Most top jewellers these days promise to buy back gold at the prevailing rate should you choose to go down this route.
While this means that you won't be compensated for the wastage that you paid for or the making charges, you at least have an assurance to fall back on.
Also, ensure that there is an exchange and buy-back period and policy too and that you are aware about it. This will ensure that you can return your ornament in case you have any grounds for complaint.
The bill, please
To ensure all this, do insist on a bill. Yes, you might have to pay value-added tax; yes, you might have to share your PAN details soon with the jeweller if your purchase is for an amount more than Rs 100000 - but a bill that jots down every important detail of the purchase goes a long way towards ensuring transparency and providing you assurance. It is something you can turn to, in case you are forced to approach a Consumer Court too.
And it is also your contribution towards ensuring a more transparent gold market in the country.
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Buying gold? Have any question? Write in to us at firstname.lastname@example.org or post them in the comments section at the end of the article and we shall have our expert Gnanasekar Thiagarajan answer them for you.