For the week ended August 6, 2016:
- In a historic move for India, the long pending Goods and Services Tax Bill got cleared in the Rajya Sabha or the Upper House of the Indian Parliament. It is now up for discussion in the Lower House. The introduction of the comprehensive indirect tax is expected to have far reaching benefits for India, in terms of making the country a unified market, reducing transactional costs, costs of compliance and also administrative costs. The tax is to be implemented at both the central and state levels, with an inter-state tax to be levied in case of inter-state transactions or imports.
- Growth numbers looked good as core sector index increased by 5.3% on a year on year (yoy) basis in June as production of coal, cement and fertilisers picked up.
- Agriculture also continued to progress as the area under Kharif cultivation grew by 5.2% during the past week, led by sharp improvement in area under pulses.
- In our continued look at the ongoing impact of Brexit on exchange rates, the highlight was a sharp depreciation in the GBP with respect to the INR at the end of the week as the Bank of England dropped interest rates to 0.25%, the lowest in its 322 year old history, along with the announcement of a stimulus package, in order to provide a buffer for the UK economy from the economic hit from Brexit.
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