The Comptroller and Auditor General exposed weak oversight of hallmarked gold jewellery sold by the Bureau of Indian Standards. The audit showed the agency failed to check 83.25 per cent of registered jewellers between 2020-21. Many shops got registrations, but the BIS said manpower constraints stopped them from conducting enough audits.
The Comptroller and Auditor General (CAG) has exposed weak regulatory oversight over hallmarked gold jewellery sold across the country in an audit of the Bureau of Indian Standards (BIS), potentially unsettling consumer confidence in the assurance of purity in India’s gold jewellery market.
The CAG’s draft report on ‘Subject Specific Compliance Audit’ on standardisation and other related activities in BIS” reportedly highlighted the BIS’s failure to cross check majority of jewellers’ claims over purity of hallmarked gold offered to consumers.
The draft report is believed to have observed that the BIS could not achieve a modest surveillance audit target of at least one visit per year to 83.25 per cent registered jewellers’ facilities in the last five years, from 2020-21, for verifying conformity of hallmarked yellow precious metal articles.
Parliament watch
The CAG report is expected to be tabled in Parliament after accommodating final response to their finding from the Ministry of Consumer Affairs, Food and Public Distribution, under which the BIS functions. It was shared to Ministry in July, this year.
The law mandates sale of only hallmarked gold jewellery in 392 notified districts of the country. At present, there are around 2.3 lakh BIS registered jewellery shops. Though hallmarking is not mandatory for silver jewellery, jewellers voluntarily are opting for hallmarking to boost the confidence of consumers.
The five-year data in the report reportedly showed a surge in the registration of jewellers for selling hallmarked gold but the corresponding regulatory enforcement continued to be abysmally low. While number of licence holders in 2024-25 was 28,865, the BIS carried out surveillance audit only on 5,444 jewellers, leaving remaining 23,421 others unchecked, which worked out to a high of 81.13 percent.
Hallmarking identifies with a regulated process that involves registration of jewellers, testing of gold purity at recognised Assaying and Hallmarking Centres (AHCs), and identification of individual hallmarked articles through a unique six-character alphanumeric Hallmarking Identification Number (HUID).
Manufacturers, distributors and retailers of gold jewellery have to obtain BIS registrations. Post that, jewellers are required to send their articles to a BIS-recognised AHCs. The AHC has to test the gold jewellery to verify its purity and finesse and issue a HUID to every article that confirms to the standards.
The BIS reportedly faltered in meeting the surveillance target benchmark for AHCs by 43.7 per cent.
Manpower constraints
Responding to the draft report, BIS reportedly pleaded manpower constraints. Further, it claimed difficulties in collection of samples from geographically difficult areas. The auditors did not find the replies convincing.
Though a consumer can enter the HUID in the BIS Care mobile application using the ‘Verify HUID’ facility to check the identification details of the hallmarked article, consumers may have reason to doubt the real value for money in their investment in gold in the absence of the mandatory backhand regulatory checks.