The government's desicion to scrap old currency notes of Rs 500 and Rs 1,000 resulted in a frenzied rush of customers thronging jewellery shops in many parts of the country.
The jewellery industry too welcomed on Tuesday government's move saying gold demand will rise as people will have more faith in the precious metal than the currency notes.
"It will create havoc for a little while and the economy will also destablise. But overall, it is going to be good for the country. In fact, the jewellery industry will thrive as people will have more trust on jewellery than currency notes," Gitanjali Gems chairman and managing director Mehul Choksi told PTI.
Choksi said there will be crisis for some time. "If you want to buy vegetables tomorrow and you will not have notes in lower denomination, what will you do?"
Stating that there could be short-term impact, PC Jewellers managing director Balram Garg said, "This is a very good decision for long term especially for the organised sector. There could be impact on pure gold demand, which is good for jewellers."
Echoing these views, All India Gems and Jewellery Trade Federation (GJF) chairman Sreedhar GV said: "This affects all industries, it will also affect the jewellery industry. We are in favour of the decision announced by the Prime Minister."
He noted: "There may be some problems for unorganised jewellers, but this will help them get organised." About 70-75% of jewellers in the country are unorganised. But 25% of the organised jewellers are contributing more than 80% business, he added.
Sreedhar said the industry body will not seek more time to implement this decision. India is the world's largest gold consumer and imports a sizeable chunk of its total annual consumption of around 900-1,000 tonnes.