Monetary Policy, Oct’17 – Trudging through Increased Complexity…

The monetary policy committee’s (MPC) decision to keep the policy rate unchanged in its today’s meeting was not a surprise. This is so as it had taken the risk to reduce rates in its last meeting and the, then stated, threat of rise in inflation has actually played out. The threat was first stated by MPC in Feb’17 when its policy stance changed from “accommodative” to “neutral”. CPI since then has moved from about -0.5% in Feb to over 3% in Aug, in line with its projections, and there is not much reason to believe its projections would go wrong for the rest of the year.  Continue reading

 

GST – Is it really hurting Exporters..??

While the economy as a whole continues to go through the painful transition to GST, one section getting more impacted is the exporters. This is so since they receive considerable amount of money back as tax refund from the government and the same is getting postponed with the extension of deadline for filing of GST returns. So, how exactly has GST affected exporters more than others.?? A look at the issue..

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GST Network – Part II…

There is still some lack of clarity with regard to inter-state sale of goods which is covered by integrated GST (IGST). If a business is selling goods to another state, he would have to pay the applicable tax under the head IGST and not CGST and SGST. This is collected by the centre and subsequently shared with buyer state equally.

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Understanding GST Network (Part I)…

The much awaited transition to GST has finally happened and appears to be getting settled. While the legislative changes with laws being passed separately by all the states, formation of GST council, formulation of rules etc were one aspect of GST, equally serious challenge is its implementation, a task being handled by GST Network (GSTN). While transition appears to be smooth, the acid test of IT infrastructure would be when the businesses file the return for the month of July. A look at how GSTN prepares to handle the task...

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Ordinance on NPAs – The Fight Continues…

The promulgation of the Ordinance yesterday for resolution of Non Performing Assets (NPAs) is another measure to tackle the crisis gripping the banking sector. Yet, the ordinance could be another dead ball and nothing that one can hope would work wonders for lack of market participants. A look at the implication of the ordinance...

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India’s Growth Story – Are We Better Off.. Or, Worse Off..??

United Nations Global Compact (UNGC) report, released this week, stating that richest 1% Indians own 53% of the total, second worst in terms of wealth inequality, puts again a question mark over India's developmental model. As per an IMF paper, Gini coefficient has risen sharply for the nation since 1990 despite significantly higher growth rate. So, is it is impossible to achieve both growth and lower income inequality and are the two mutually exclusive. A brief look...

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Understanding GST (Part I)…

The countdown to the implementation of Goods and Services Tax (GST) has begun with Bihar becoming the second state to clear State GST (SGST) bill today after Telangana. The Parliament has already passed the centre GST (CGST) and Inter-state GST (IGST) late last month. A look at the bill and various complexities attached to it..

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Understanding Universal Basic Income (UBI)…

The Economic Survey has floated the idea of Universal Basic Income (UBI) which essentially means transferring a certain amount of money into the account of people rather than trying to reach out to them through the welfare schemes. As per the Survey, it is an idea whose time has come for serious discussion. A look at the rationale for the scheme and various pitfalls..

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Understanding Shell Companies…

The recent decision of the government, with the direct involvement of the Prime Minister's Office (PMO), to crack down on shell companies brings focus on the operation of these companies. Shell companies have been in focus and subject of intense debate not just in India but globally also, especially after the leaked Panama Papers. A look at the shell companies and how they operate..

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