The Ignited Indian

The bulls have climbed the graphs so high, that we need a telescope to look at them. Or so feels everyone observing the markets reach new heights every day. Compared to a bear market, this bullish run is a good problem to have but nevertheless, a problem. For the cautious, this daily relentless surge causes anxiety as one is really not able to put a finger on the real reason for this euphoria. Everyday a jump over 200 points is good. But too much of everything, even the good can be harmful. This isn’t a pessimistic view, but just a cautious look at the reason for markets’ happiness. The reasons for markets being so excited majorly is the lowering inflation. With WPI inflation was observed at a record low at 0.9%. Retail inflation cooled off to a historic low of 1.54% for the past three months. CPI has been low consistently. This led the market to think that RBI may cut the rates in the next policy review meeting scheduled in August. But this seems highly unlikely, as the RBI ...

With the ring of the bell by the Prime Minister at midnight, India’s biggest taxation reform rolls out in all its royalty, as a result of consistent efforts of the Indian administration for more than a decade. The experience of over 160 countries that have implemented the GST is that GST provides for a simpler tax collection and makes it very hard to evade taxes. For legal businesses it makes running their concerns easy and also reduces the competitive disadvantage they traditionally had from tax evading competitors. Like any change in tax structure in any economy, this will result inflation in the short term. The prices of most products and services are expected to go up over the next one year. That has been the case of most countries when they adopted GST. The fear of inflation is one reason that successive Indian governments have been going slow on GST implementation, so there never was a better time than this for India to rollout the GST as the inflation has been decreasing f...