[.sushilkumar]

Originally Posted by locusjag

It makes sense to nourish the hand that feeds many mouths than to feed a few mouths. An unemployed person has no use for personal income tax cuts. An employer who has laid off workers has no use for it either, nor will he be able to take back any of those who were laid off.

From a whatsapp universty student

Would not reducing individual taxes ensure that FM can boost demand directly than execting the corporates to do that. It takes few years to get those job while by cutting away individual taxes, you are boosting the consumption immediately. ultimately, govt will be able to earn more revenue as well via GST / taxes indirectly.

How does she ensures that this cut will result in more jobs and growth. Personally as a salaried person, my income level is stagnant for 3 years due to which i am unable to take decisions of any new purchases. Unless i have money to spend, there is no point boosting manufacturing.

[KMT]

http://www.ecoti.in/SCcIBa

@ locusjag, this article from todays ET will help you clear some confusion that your whatsapp uni curriculum might have caused.

The highpoint of this years budget V1 was the khadi file folder, and some highbrow talk of how the rich should do nationbuilding.
Since then we have had V2 and V3 of the budget.
Quick changes no doubt, but hardly gives the investor or consumer any comfort as to the stability of these policies.

During stormy times it is generally better to have a seasoned hand manning the tiller.

Anyway read the article, the Journo has done a decent job explaining a likely future scenario.

[locusjag]

Originally Posted by .sushilkumar

Would not reducing individual taxes ensure that FM can boost demand directly than execting the corporates to do that. It takes few years to get those job while by cutting away individual taxes, you are boosting the consumption immediately. manufacturing.

Actually, boosting consumption by reducing personal taxes and then expecting the economic engine to pick up steam is more circuitous if one thinks about it. Better disposable income at the hands of those who still have jobs may have to trickle to financial savings instruments, essentials/commodities and then to discretionary spending. From there, all that spending may or may not lift all boats in the industry...

And reducing personal income taxes won't render our industry competitive in the global trade arena either - and this is something which is one of the intended outcomes of what Sitharaman has done. I wonder if she hopes that enhanced Indian sails will catch more winds at the expense of the Chinese, with the trade war and all that.

How does she ensures that this cut will result in more jobs and growth. Personally as a salaried person, my income level is stagnant for 3 years due to which i am unable to take decisions of any new purchases. Unless i have money to spend, there is no point boosting manufacturing.

You have a salary finding its way to you regularly. Great!

We'll see anyway if this proves to be the extinction event, the very end of the NDA's bullrun at the center. Who knows?

[volkman10]

As it is clear that the GST cut asked by most auto manufacturers have been unheard by the Finance Ministry, the Govt. asks the manufactures to find their own ways of boosting demand.

The thing called Niti Aayog :

automakers to slash prices and revive demand.

Maruti Suzuki Chairman:

It[a slash in prices] is not something I can announce here... wait a couple of days and you'll have the answer

Mahindra & Mahindra managing director Pawan Goenka who said that his company was already offering discounts of up to 20 per cent on its vehicles in order to boost demand.

Link

[.sushilkumar]

Originally Posted by locusjag

Actually, boosting consumption by reducing personal taxes and then expecting the economic engine to pick up steam is more circuitous if one thinks about it. Better disposable income at the hands of those who still have jobs may have to trickle to financial savings instruments, essentials/commodities and then to discretionary spending. From there, all that spending may or may not lift all boats in the industry...

Unfortunately, same hold true to corporates as well. History is replete with examples. Instead of creating jobs & growth, corporates typically end up having more cash in hand which gets invested no where. Ultimately, those who lost jobs continue to search for one and get hired at compormised terms at new place. Such boosts have been given in past as well and is a cycle which repeats each decade. Why not try a new way by boosting money in hands of those who create demand or may be dole out 50:50 to both. .

Originally Posted by locusjag

And reducing personal income taxes won't render our industry competitive in the global trade arena either - and this is something which is one of the intended outcomes of what Sitharaman has done. I wonder if she hopes that enhanced Indian sails will catch more winds at the expense of the Chinese, with the trade war and all that.

This global trade is new mantra that economist cite these days. MNC's fear regulatory environment more compared to taxes. They know anyway that tax gets passed onto end user & their profit per unit will remain as it is.

Do any one have any stats wrt to typicaly house hold savings for last 3 decades. i bet, they are steadily decreasing. I fear we might be adopting american ways too fast for our own comfort.

Originally Posted by volkman10

As it is clear that the GST cut asked by most auto manufacturers have been unheard by the Finance Ministry, the Govt. asks the manufactures to find their own ways of boosting demand.

Thanks god that common sense have prevailed. Imagine the profits these automakers have earned if they can offer 20% discounts. I am in market for a new car. MSIL is offering standard discounts while Tata dealers seems more in stress for a sale.

[volkman10]

Most manufactures will not cut car prices but will continue on the existing discount offers only.

Link

[Muski]

Originally Posted by Turbanator

Correct, I got this forward.

Amazing country! Amazing people!
Corporate tax 22%, Individuals tax 35%
&
Individuals are celebrating!

As someone rightly said here, this exercise of reduction of corporate taxes will make rich guys even richer.

I think things are more grey than what you paint. We in India have very small manufacturing sector compared to services sector. Now, this is another reason for lack of jobs in India as manufacturing is what gets mass jobs. Today one of the biggest opportunity for us is US China trade war due to which many companies are moving out from China. But countries like Vietnam are more attractive then us due to lower taxes, better infrastructure and having FTA with US and EU both while we have none. look at the amount of FTA's they have. Also have a look here. and here. RCEP is just around the corner and we will be paying through out teeth in future if we don't act now. Already our annual electronics import bill is at par with oil bill. 10 years down the line we will be importing billions of dollar worth battery packs alone if we dont get our act together.

This rate cut is only one step in making india competitive again, we need more and effective measures asap. The Modi Trump expected mini deal is another step (possibly if it works out). We need to fix our banking sector NPA's and corporate debt soon so that interest rates fall. We can be attractive even with less efficient infra compared to say Vietnam due to size of domestic market and strong service sector. Lets hope things work out. Rebounding of sensex today means nothing if long term measures are not taken.

Also, GST rate cut in automobile sector is pointless and thankfully has not been done. Current GST rates are at par with total incidence of tax in pre-GST era. Can you imagine automobile companies asking for reduction in VAT rates for compensating their profit margin and low sales?

[.sushilkumar]

Originally Posted by volkman10

Most manufactures will not cut car prices but will continue on the existing discount offers only.

Link

So as expected, the claim of honorable FM goes off the window into thin air of boosting growth and jobs. on a related development below is the statement from Bajaj

corporate-tax-rate-cuts-sitharamans-decision-has-reimbursed-all-discounts-we-gave-to-consumers-says-rajiv-bajaj

clearly , they lobbied for it and got it. While Hon RBI governer continues to beg banks to cut interest rates & banks continue to give two hoots to him.

There’s room for more rate cuts, says RBI’s Governor Shaktikanta Das

Ultimately, its all going to come out of tax payer pocket whether shortfall in revenue or banks NPA.

[TROOPER]

GST council begins review of rates, items to raise revenue

GST on cars, colas, tobacco may be raised


Source - https://timesofindia.indiatimes.com/...w/72356691.cms


Seriously hope they are not planning on giving the Auto industry another scare.

[streetfighter]

Don't mean to bash the government, and neither I'm an expert but it defies any logic what they are trying to fix. The economic slowdown is not a supply problem (except for Kia & MG). The problem is there is no demand for goods (for various reasons) which is affecting all industries and the economy. Finance minister lowered corporate taxes, helped industries... but was the stimulus needed there? What if common people was given extra spending power with lower income tax, lower interest rates for loan, better consumer laws. This would create a more positive outlook IMHO

[RaghuVis]

Originally Posted by TROOPER

GST on cars, colas, tobacco may be raised


Seriously hope they are not planning on giving the Auto industry another scare.

I think this is a leaked scare to ensure Auto industry doesn't lobby for decrease in GST. It will be good if they can be kept busy trying to ensure there is no more increase in GST

Originally Posted by streetfighter

Finance minister lowered corporate taxes, helped industries... but was the stimulus needed there?

Correct me if i'm wrong but she just reversed a decision that was taken during union budget by, hmm, er, herself . It was never meant as a stimulus package.

[octane_100]

Originally Posted by TROOPER

GST council begins review of rates, items to raise revenue

GST on cars, colas, tobacco may be raised


Source - https://timesofindia.indiatimes.com/...w/72356691.cms


Seriously hope they are not planning on giving the Auto industry another scare.

Any increase in rates will only dampen the sentiment further. The problem might be that this govt is considering arithmetic possibilities only without understanding the causality.

[TROOPER]

Originally Posted by RaghuVis

....

Correct me if i'm wrong but she just reversed a decision that was taken during union budget by, hmm, er, herself . It was never meant as a stimulus package.

No that wasn't corporate tax rate she reversed.

She had levied enhanced surcharge on FPIs (foreign portfolio investors), which she then reversed.

[nitinkbhaskar]

Came across this article : GST rate cut for 2 wheelers

Anyone idea / thoughts how soon (and if) this is going to come into play ?
Looking forward to a purchase but done want to jump the gun and repent later if this law comes into force