FMCG, power, dairy among top 5 sectors likely to gain from GST: Axis Securities
The GST is a structural reform and should accelerate the pace of growth in India’s GDP after its implementation, said Arun Thukral, MD and CEO, Stock Exchange, in an exclusive interview with Kshitij Anand of Moneycontrol.
“We believe that consumables such as consumer goods, dairy, equipment, logistics, storage and the electricity sector should benefit the majority,” he said.
Q) What are your comments on the GST rate? Impact on the economy, markets, etc.
Deliveries of goods in the GST were welcome – about 80 percent of products will attract 18 percent or less of GST versus 35 percent of those currently taxed at 27 percent or more. In fact, the introduction of GST will help reduce prices for the end user.
Daily items, including milk, cereals, were exempt from the tax, in the GST system, which facilitates the stock market man. It will also push for greater consumption as it would be within reach of a larger population.
Due to the possibility of goods arrived so far, the consumer sector is a major beneficiary and consumer goods is a clear winner. Markets are more than welcome to the new rates under the GST system. The GST is a structural reform and should accelerate the growth rate of India’s GDP after implementation.
Q) Major areas of 3 to 5 that you think could have a positive impact on GST rates and should be on the radar of investors.
The biggest beneficiary of the implementation of the GST would be areas that have a high participation in the unorganized segment because the market share will increase from disorganized to those organized players. In general, the GST will result in lower tax effects, reduced logistics costs, greater compliance, etc.
We feel consumable as consumer goods, the dairy industry would benefit greatly; The logistics and warehousing sector will benefit both qualitatively and quantitatively, as the time spent bordering state borders saves fuel and time to reach the destination. Small cars will be slightly more expensive, while the SUV will attract an additional step.
The energy sector will gain as the rate of thermal coal was rated at 5% compared to 11.7% previously. This will help reduce the final price would definitely passed to the end consumers. Capital assets placed at a rate of 18% of the slab would reduce the cost of developing the electricity project.
Q: Does the current issue pass 1000 days of Modi’s government and its views on this and how it was carried out on a scale of 1 to 10?
Well, we are talking about the initiatives taken by the government in the last three years. Then begin by examining one by one. Infrastructure is one of the areas that the government has tried to approach. No country can make progress if infrastructure is poor; Infrastructure should be the best quality, we set China and other emerging countries, once they began to grow, infrastructure was their first priority.
Thus, between 2009 and 2014, the advances in road construction were plo, only the 6 km 9 km per day were the maximum running frequency. Between 2015-2016 and 2016-2017, it began to improve and in 2017 it rose to about 22 km of road per day, although they have an ambitious target of around 40 41 km. 22 km a day is impressive and seriousness can be seen in the allocations made in the infrastructure sector in the last two budgets.
Whether you’re looking at this year’s budget or last year’s budget, there was a massive allocation for the infrastructure sector. In the 2017 budget, Rs 3.96 lakh cr were allocated to the infrastructure sector in general. Rs 2.4 lakh allocations million rupees for roads, railways and ports were carried out in 2017-18, of which Rs 1.31 lakh cr were reserved exclusively for railways. So this is a great achievement.
And in the road segment, they started with a hybrid annuity in which the government takes 40 percent. 100 Costs and shoulders of developer-investors are still 60 percent. 100, which works fine. If we look at the infrastructure in the broader term, we can reach the housing for all or affordable housing, which will also be a good topic to come.