In India, gold isn't just a metal; it's synonymous with security and tradition. However, when prices touch the level of 1. 6 lakh rupees per 10 grams, it starts moving out of the reach of the common man, while currently, gold and silver prices are at historic highs. In such a situation, everyone's eyes are fixed on the upcoming Union Budget 2026-27. People are hoping that the government will make some announcements that will provide some relief to their pockets and make it easier to shop for weddings at home. Industry experts have also demanded several key changes from the Finance Ministry.
Why are Gold and Silver Prices Skyrocketing?
First, it's important to understand why prices have increased so much. In the international market, the price of gold has reached near 5,000 dollars and silver near 100 dollars. According to experts, the main reason behind this is global tension and the weakness of the rupee. Apart from this, a major reason is also being cited as the 'dispute related to Greenland', which has affected the supply chain and market sentiment. Due to these reasons, prices are skyrocketing in the domestic market, troubling both common investors and buyers.
Burden on the Common Man: Industry Demands Relief
Rising inflation has badly squeezed the purchasing power of Indian families. Chetan Thadeshwar, MD of 'Shringar House of Mangalsutra Limited', believes that in Budget 2026, the government should focus on increasing domestic consumption, while his demand is that the import duty on gold should be rationalized. If the tax structure improves and the duty is reduced, its direct benefit will go to the common customer. Increased demand won't only brighten the retail business but also create new employment opportunities in the manufacturing and export sectors.
Will the SGB Scheme Restart?
Buying gold doesn't just mean buying jewelry; it's also an investment, while experts are strongly advocating for the government to restart the 'Sovereign Gold Bond' (SGB) scheme. According to Jashan Arora, Director of Master Trust Group, frequent changes. In taxes and duties cause prices to jump suddenly, shocking investors. The SGB scheme was very popular among investors because the government gave 2. 5% interest in it and there were also tax benefits. It was discontinued in 2024, and there is now a demand to restart it. Along with this, awareness campaigns and tax exemptions for promoting digital gold are also expected.
Plea to Reduce GST
When you buy jewelry, you've to pay making charges and GST in addition to the price of gold. Currently, 3 percent GST is levied on jewelry. The 'All India Gem and Jewellery Domestic Council' (GJC) has appealed to the government to reduce it to 1. 25% or 1. 5%. The organization argues that if the tax is lower, jewelry will be cheaper and people from the middle class and rural areas will be able to shop more. This will also reduce the pressure of working capital on small jewelers and make it easier to do business.
Future Outlook and Market Sentiment
The upcoming budget is crucial for the gems and jewelry sector, while if the government addresses the long-standing demand for duty reduction, we could see a significant correction in domestic prices. However, global factors like US Fed rates and geopolitical conflicts will continue to play a role. For now, consumers are advised to keep a close watch on the February 1st announcements before making high-value purchases. The potential return of SGB could also provide a much-needed non-physical investment avenue for those looking to hedge against inflation.
