Economic articles presentation by B5

By
Abhishek Gope
Amrit Prasad Patnaik
Harshwardhan Singh
Priyesh Mishra
Riya
Sampad Sagar Rath
Vrinda R Krishnan
 ONE YEAR ON, GST IS SUCCEEDING AND
GROWING
 Within one year of GST launch, 48 lakh
enterprises have been added as compared
with 66 lakh enterprises registered in all
these years since Independence. This may
be attributed to the simple procedures
adopted under GST.

THE HINDU|Published on August 12, 2018

EFFECT OF Formalization ON TAX BASE
INCREASE IN BUSINESSES COMING
UNDER GST PURVIEW
ONE YEAR DOWN THE LINE
 BENEFICIAL OUTCOMES OF GST

 In the pre-GST period, traders had to comply with the

rules and regulations of various tax departments and
laws. Now, tax compliance has been easier for traders.
 The government's revenue collection has also gone up.
The average revenue collection per month in the eight
months of 2017-18 was Rs 89,700 crore per month. This
propelled the annual revenue collection by about 12 per
cent.
 The assessee base under GST has increased by about 85
per cent in the past two years. On the eve of the GST
rollout, the assessee number stood at around 65 lakh,
which has gone up to 1.20 crore now.
Problems faced

 Pertinent Issues for Small Traders

 Issues for E-commerce Companies

 Adapting to IT Ecosystem is Hard

1st Article- India's real GDP growth in FY20 to
come below 5%: IHS Market

 Latest GDP data for July-September quarter showed

a significant further moderation in the pace of
economic growth to 4.5 per cent.
 In first quarter of FY20 GDP showed a growth
of4.8% compared to 7.5% a year back.
 REASONS FOR DECREASE IN GDP:

 Slump in manufacturing output.

 Public sector banks have higher nonperforming
assets(NPA).
 The sharp contraction in capital goods output.
 Sharp decrease in sales of automobile sector .
 EFFECT ON IS-LM CURVE:

 Decrease in national income shifts

the IS curve downward.
 Due to liquidity crunch LM curve
shifts backward.
 Equilibrium point shifts backward.
STEPS TAKEN BY RBI:

 Cut in corporate tax.

 Revise in repo rate six times since February. Now the revised
repo rate is 4.9%.
 Injection of $10 billion in banking sector to revive them.
 Relax FDI rules.
 Suggestions

 Improve credit flow to both consumer and industry.

 Factor market reforms, including bringing the cost of land down.
 Reduce the GST slab rates
 Change GST collection to quarterly for companies below Rs 1 cr.

Source: https://economictimes.indiatimes.com/news/economy/indicators/indias-real-gdp-growth-in-fy20-to-
come-below-5-ihs-markit/articleshow/72423968.cms
 2nd Article- RBI has for the 5th time in 2019
reduced the repo rate-

HIGHLIGHTS:

 Repo rate or short term lending rate reduced bt 25bps.

 Fifth rate cut in 2019.
 GDP growth forecast lowered for current fiscal to 6.1 percent.
 Government stimulus measures to help strengthen private
consumption and spur investments.
How rate cut affects the economy-

 Business spending

 Market returns

 Potential for improved trade

 Industrial sector

 Consumers
Why RBI’s rate cuts not worked for
economy?
Let’s understand it
practically from IS-LM curve
, what RBI wants to do and
what happen-