Half marks for hallmarks
Business Standard /
The word “hallmark” is first recorded as having been used in the year 1721, for jewellery that had been taken to Goldsmiths’ Hall in London to be assayed and marked. Almost 300 years on, the Indian government has finally made the hallmarking of gold jewellery mandatory.
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Thus, while the extension of assaying is both necessary and well intentioned, it is uncertain whether the Bureau of Indian Standards has ramped up its capabilities sufficiently in the decade that it has been given to do so. The larger producers of jewellery took advantage of voluntary hallmarking to help their machine-made ornaments win customer trust. For compulsory hallmarking, however, and the extension to smaller, hand-made producers, operational problems surrounding implementation must be addressed, or the step may become counterproductive. It is not easy to assay annually over 900 tonnes of gold — nearly 80 per cent of which is traded in the form of jewellery by over 350,000 jewellers. BIS is the sole agency designated by the government to operate this scheme, and it will have to massively expand its assaying infrastructure — it currently has fewer than 200 centres.
BIS will have to contend with several other practical problems as well. Stamping the quality-assurance mark on machine-made jewellery was easy, but doing so on hand-made ornaments will be tougher. And where will the mark appear on smaller pieces such as nose pins and slim gold chains? Nor will it be easy to assay the work of rural goldsmiths, many of whom work from gold scrap that they source from large jewellery houses. The scrap is rarely refined, to remove added alloys. Yet self-certification is not a reasonable option in a trade beset by rampant malpractice and a credibility deficit. BIS will have to expand its own network considerably — and, if it finds itself unable to manage to do so in time, to come up with solutions to the practical problems, such as outsourcing parts of the job to authorised quality-marking agencies in the private sector.
Business Standard /
New Delhi January 12, 2012, 0:21 IST
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The government's new policy on assaying gold will be difficult to implement.
The word “hallmark” is first recorded as having been used in the year 1721, for jewellery that had been taken to Goldsmiths’ Hall in London to be assayed and marked. Almost 300 years on, the Indian government has finally made the hallmarking of gold jewellery mandatory.
The government introduced voluntary hallmarking in 2001; four metropolitan cities saw mandatory hallmarking in 2007; it has now at last been extended across the country.
Hallmarking is in response to a clearly felt need for quality control in an industry that is expanding but still based on incomplete information. Given the high value of most transactions in gold jewellery, and the ability of traders to conceal from consumers the true quality of what they are buying, some form of quality assurance is certainly needed. While gold has considerable resale value, that is dependent on arbitrary standards of quality evaluation. Even after the introduction of voluntary hallmarking, most jewellery bought by Indian consumers has continued to be bought on the basis of trust. This is particularly problematic as gold’s traditional role as a store of value and hedge against bad times is being augmented by its use as collateral in the formal financial system.
Thus, while the extension of assaying is both necessary and well intentioned, it is uncertain whether the Bureau of Indian Standards has ramped up its capabilities sufficiently in the decade that it has been given to do so. The larger producers of jewellery took advantage of voluntary hallmarking to help their machine-made ornaments win customer trust. For compulsory hallmarking, however, and the extension to smaller, hand-made producers, operational problems surrounding implementation must be addressed, or the step may become counterproductive. It is not easy to assay annually over 900 tonnes of gold — nearly 80 per cent of which is traded in the form of jewellery by over 350,000 jewellers. BIS is the sole agency designated by the government to operate this scheme, and it will have to massively expand its assaying infrastructure — it currently has fewer than 200 centres.
Thus, while the extension of assaying is both necessary and well intentioned, it is uncertain whether the Bureau of Indian Standards has ramped up its capabilities sufficiently in the decade that it has been given to do so. The larger producers of jewellery took advantage of voluntary hallmarking to help their machine-made ornaments win customer trust. For compulsory hallmarking, however, and the extension to smaller, hand-made producers, operational problems surrounding implementation must be addressed, or the step may become counterproductive. It is not easy to assay annually over 900 tonnes of gold — nearly 80 per cent of which is traded in the form of jewellery by over 350,000 jewellers. BIS is the sole agency designated by the government to operate this scheme, and it will have to massively expand its assaying infrastructure — it currently has fewer than 200 centres.
BIS will have to contend with several other practical problems as well. Stamping the quality-assurance mark on machine-made jewellery was easy, but doing so on hand-made ornaments will be tougher. And where will the mark appear on smaller pieces such as nose pins and slim gold chains? Nor will it be easy to assay the work of rural goldsmiths, many of whom work from gold scrap that they source from large jewellery houses. The scrap is rarely refined, to remove added alloys. Yet self-certification is not a reasonable option in a trade beset by rampant malpractice and a credibility deficit. BIS will have to expand its own network considerably — and, if it finds itself unable to manage to do so in time, to come up with solutions to the practical problems, such as outsourcing parts of the job to authorised quality-marking agencies in the private sector.
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Also Read Related Stories News Now - Zinc extend losses in futures trade on global trend
- Jobless Britons applying for work at South Pole
- Copper up 2% on import data
- Copper futures marginally up 0.19% on global cues
- Zinc up marginally in futures trade
- Nickel futures weaken on global cues
Thus, while the extension of assaying is both necessary and well intentioned, it is uncertain whether the Bureau of Indian Standards has ramped up its capabilities sufficiently in the decade that it has been given to do so. The larger producers of jewellery took advantage of voluntary hallmarking to help their machine-made ornaments win customer trust. For compulsory hallmarking, however, and the extension to smaller, hand-made producers, operational problems surrounding implementation must be addressed, or the step may become counterproductive. It is not easy to assay annually over 900 tonnes of gold — nearly 80 per cent of which is traded in the form of jewellery by over 350,000 jewellers. BIS is the sole agency designated by the government to operate this scheme, and it will have to massively expand its assaying infrastructure — it currently has fewer than 200 centres.
BIS will have to contend with several other practical problems as well. Stamping the quality-assurance mark on machine-made jewellery was easy, but doing so on hand-made ornaments will be tougher. And where will the mark appear on smaller pieces such as nose pins and slim gold chains? Nor will it be easy to assay the work of rural goldsmiths, many of whom work from gold scrap that they source from large jewellery houses. The scrap is rarely refined, to remove added alloys. Yet self-certification is not a reasonable option in a trade beset by rampant malpractice and a credibility deficit. BIS will have to expand its own network considerably — and, if it finds itself unable to manage to do so in time, to come up with solutions to the practical problems, such as outsourcing parts of the job to authorised quality-marking agencies in the private sector.
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