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Industry sees India hitting 10% GDP post GST rollout

Discussion in 'World Economy' started by randomradio, Aug 5, 2016.

  1. randomradio

    randomradio Mod Staff Member MODERATOR

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    http://www.moneycontrol.com/news/bu...-hitting-10-gdp-post-gst-rollout_7193801.html

    Industry sees India hitting 10% GDP post GST rollout

    The country witnessed a momentous occasion after the Rajya Sabha today passed the historic Goods and Services Tax Constitutional Amendment Bill.

    The country witnessed a momentous occasion after the Rajya Sabha today passed the historic Goods and Services Tax Constitutional Amendment Bill.
    The tax, upon rollout, will replace almost all state and central indirect taxes and levies such as excise, service tax, sales tax, VAT and octroi.

    The most vocal proponent of the bill, Adi Godrej, believes the tax's rollout will add at least 1.5-2 percent to the country's growth rate.

    GST's benefits are many: it will widen the tax base by easing compliances, boost ease of doing business, reduce the overall tax rate in the economy and thus help investment and boost growth. Being value-added in nature, it will also eliminate the economically-negative practice of levying tax on tax. Further, by doing away by differential tax structures in various states, GST will for the first time create a national market and boost inter-state trade.

    "The biggest positives from the GST is that it will lower the tax rate and make tax evasion very difficult," Godrej said.

    The general expectation is that the GST rate would be closer to 18 percent. Currently, manufacturing is tax at around 30 percent while services are at around 14 percent.

    Further, the GST will also level the playing field between the unorganized and organized sector, as the former could get away from paying taxes and enjoyed a tax advantage.

    "The industry will benefit tremendously," said Godrej. "Overall, consumption, production and investment, all will get a boost."

    Maruti Suzuki Chairman RC Bhargava said that while the Bill has been passed, effective implementation of the tax will be equally important.

    After all, the minutae of the Bill -- the standard GST rate, which items will qualify for the standard, concession and luxury/sin tax rates -- will all be thrashed out later the GST Council comprising the state and central officials.

    M&M's Pawan Goenka said that the transition period around the time GST is rolled out will be important.

    "The transition will be fairly complex. GST's success will depend on the complexity of the documentation processes. The model law as it stands needs finetuning," he said.

    The tax's rollout will, however, give a fillip to credit growth, Yes Bank chief Rana Kapoor said. "This is the second take-off of the economy. It will rebuild private sector confidence in investments. and unleash several multipliers of growth."

    Kapoor, who said GDP growth could hit double digits post GST rollout, added that logistics and transporation sectors will gain the most.

    "Post the strong monsoon, this is icing on the cake," he said.
     
    Indx TechStyle, Gessler and Agent_47 like this.
  2. Picdelamirand-oil

    Picdelamirand-oil Lt. Colonel MILITARY STRATEGIST

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    No Post the strong monsoon Rafale deal is icing on the cake
     
  3. Tejpal

    Tejpal Lieutenant FULL MEMBER

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    For you, maybe. In reality, no Indian gives a damn about the Rafale deal.
     
  4. randomradio

    randomradio Mod Staff Member MODERATOR

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    Right. IAF will fly the jets in the rain. And the jets will always be clean. :D

    Relevant people will be very happy.

    Anyway, guys, don't change the topic. This is the GST thread now.
     
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  5. randomradio

    randomradio Mod Staff Member MODERATOR

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  6. Tejpal

    Tejpal Lieutenant FULL MEMBER

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    This is very good news for India. @randomradio and @vstol jockey I've heard a theory that Congress only agreed to this because it will result in high inflation and hurt Modi in 2019. Is this true?

    Also, from your perspective, how much of a big difference will this make for India? Adding 2% to the GDP is immense.

    This a brainchild of BJP/NDA c. 2001, no?
     
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  7. randomradio

    randomradio Mod Staff Member MODERATOR

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    There will be a temporary loss of jobs because some sectors that did not pay taxes will now have to pay taxes. So they will have to cut jobs to secure losses.

    Anything positive adds to inflation in India. Modi has a plan for that. The increased revenues will be used to fund welfare programs that will benefit all the voters.

    That's a major boost to growth. At its normal pace, we would see 10% growth only after 3 years, with the boom in infrastructure. But with GST, 10% growth will be possible from the same year it is implemented. In fact, we can look at much higher growth than 10% after 3 years because of the new infrastructure.

    Yeah, Vajpayee govt.

    But UPA did not have the brains to pull it off like Modi's govt did. So it was stuck for 10 years. Now the bill is so good that even Congress couldn't object to it.
     
  8. Tejpal

    Tejpal Lieutenant FULL MEMBER

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    What is this going to do to land prices in India?

    Dad still has 15 crore + land in Punjab, next to Jalandhar. Higher/Lower or with GDP land value increasing/exchange rate improving?
     
  9. TickTickIndian

    TickTickIndian BANNED BANNED

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    How much land is that, 15 crores??
     
    Last edited: Aug 5, 2016
  10. Tejpal

    Tejpal Lieutenant FULL MEMBER

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    Kya?

    It's 10 acres at 1.5 crore per acre hence 15 crore + (I say plus because there is valuation for 1.75 too). Right on the GT road, 10 mins drive from Jalandhar.
     
  11. randomradio

    randomradio Mod Staff Member MODERATOR

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    Land rates will keep rising. That's for sure.
     
  12. Tejpal

    Tejpal Lieutenant FULL MEMBER

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    They've stalled at the moment, no?
     
  13. TickTickIndian

    TickTickIndian BANNED BANNED

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    Sorry I meant 15 acres.
    I want to buy alot of land in the subcontinent. That's why I asked. In Kerala it is too expensive.

    It is between 1 to 10 crores per acre.
     
  14. TickTickIndian

    TickTickIndian BANNED BANNED

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    Land prices will drop because of across the bank checking like PAN cards, etc. More difficult to use back money. Land prices dropped in Kerala because of this.
     
  15. TickTickIndian

    TickTickIndian BANNED BANNED

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    How do you celebrate in France?? Night parties, wine and whiskey?
     

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