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After opening the day on a weak note, the Indian share markets have continued to trade in the red. Sectoral indices are trading on a negative note with stocks from the metal sector , realty sector and telecom sector witnessing maximum selling pressure.
The BSE Sensex is trading down 224 points (down 0.9%) and the NSE Nifty is trading down 74 points (down 0.9%). Meanwhile, the BSE Mid Cap index is trading down by 1.3%, while the BSE Small Cap index is trading down 1.4%. The rupee is trading at 67.83 to the US$.
As per a leading financial daily, the government is set to review its ambitious plan of achieving goods and services exports of US$ 900 billion by 2020. This comes as the target is likely to be missed amid the current economic scenario in global as well as domestic markets.
The government had set the above target last year for goods and services exports, which stood at about US$ 421 billion in 2014-15 (FY15).
As per a senior commerce ministry official, the exports target looks difficult to meet and will require a review which will be aimed at taking corrective steps by assessing the impact of exports sops on various sectors.
Going forward, the exports industry expects merchandise exports to be around US$ 270-280 billion and services exports at less than US$ 150 billion in FY17. Also, the World Trade Organisation (WTO) had trimmed its forecast by over 1 percentage point as it expects global trade in 2016 to grow at the slowest pace since the financial crisis.
According to the WTO, the outlook for the remainder of this year and next year is affected by uncertainties such as financial volatility led by changes in monetary policy in developed countries, the possibility that growing anti-trade rhetoric will increasingly be reflected in trade policy, and the potential effects of the Brexit vote in the UK.
Apart from the above global threats, India's export growth has also nosedived in the month following demonetisation. This is evident in the chart below:
In another news update, Finance Minister Arun Jaitley last week said his government was doing its best to ensure the implementation of Goods and Services Tax (GST) from April 1, 2017.
Last week, the GST council cleared a substantial part of the central legislation for the proposed tax regime.
The above developments mark as a progress towards the GST reform. The government is keen to roll out the new regime from April 1, 2017. However, pending issues have made this unlikely. Earlier last month, the government finalised the tax rates for GST. This came as the GST Council decided upon a multi-layered tax rate system. The Council finalised a four-tier tax structure, with the tax rate on items of mass consumption at 5%. Other slab rates are 12%, 18%, and 28%. To get a detailed view on the Goods and Services Tax (GST), you can read Vivek Kaul's report, GST & You: What the Media DID NOT TELL YOU about the GST.
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