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After opening the day on a flat note, the Indian stock markets have continued to trade near the dotted line. Sectoral indices are trading on a mixed note with stocks from the auto and telecom sectors leading the gains. Metal stocks are trading in the red.
The BSE Sensex is trading up by 70 points (up 0.3%) and the NSE Nifty is trading up by 33 points (up 0.4%). The BSE Mid Cap index and the BSE Small Cap index are also trading positively, up by 0.5% and 0.3% respectively. The rupee is trading at 66.95 to the US$.
As per a leading financial daily, most of the states have ratified the Goods and Services Tax (GST) Bill. News suggest that as many as 14 states have already ratified the constitutional amendment Bill with Sikkim, Telangana, and Mizoram also passing it in their respective legislatures. This comes as a good news and stands close to the magic number of 16 that is required to turn the Bill into a law.
That said, there also remain many tussles. This we say because of the arguments hanging around for the effective tax rate. The industry is pitching for an 18% rate. Along with this, it is also conceding that the companies may not be prepared to meet the deadline set by the government which is 1st April 2017.
Talking of the effective tax rate for GST, reports last week suggested that the standard GST rate could be closer to 22% when the tax is rolled out. As per the sources, the current estimates being drawn out in North Block have worked out a GST rate of 22% that is expected to be most amenable to states. Also, Kerala Finance Minister Thomas Isaac has said that many states would not agree to a rate below 22%.
While GST has been approved by most of the leading parties and states, the tax is far from a done deal. The GST council, a very important part of the process, will also need to be set up. It will be the job of the council, which will be two-thirds represented by the states, to decide on the GST rate after which three GST Bills (Central GST, Integrated GST, and State GST) mentioning the actual rates will be sent to Parliament and state assemblies for approval.
To know more about GST and its implications, make sure you don't miss Vivek Kaul's brilliant report on GST titled GST & You: What the Media DID NOT TELL YOU About the GST.
As per an article in the Economic Times, Niti Aayog Vice-Chairman Arvind Panagariya recently said that India's economy will accelerate to 8% growth in the current financial year. This, he said, will be backed by a good monsoon, policy reforms, and PM Narendra Modi's focus on implementation at the grassroots level.
This marks another pitch for a better GDP growth this year as compared to last financial year.
Recently, Indian Ratings and Research (Ind-Ra), also raised its growth forecast for India's gross domestic product (GDP) in the financial year 2017 to 7.8%. This was a small rise from the previous forecast of 7.7%. The upward revision was prompted by the progress of monsoon and the sowing of Kharif crop so far.
Also, Economic Affairs Secretary Shaktikanta Das recently said that India is expected to clock a GDP growth of nearly 8% this fiscal.
One must note that last year India achieved 7.6% growth in the back of poor monsoon.
While the above projections spark optimism for the Indian economy, not all is rosy in the garden. Many concerns still persist and pose a threat to the Indian economy. Vivek Kaul has spotted a trend he thinks has the potential to derail India's long-term growth story. He's of the view that there are many macro trends that could directly impact the economy and in turn you. These are the big issues like the government's handling of oil prices, India's disastrous jobs situation, the current state of India's real estate bubble, rising bad loans at the PSUs...and a lot more!
In fact, as you read this, Vivek has just come out with a full note that details all...including how this trend could impact you.
Click here to know more.
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