GST has been awaited for a very long time, and the economy is somehow facing turf for various other reasons in the meantime also. The recent hit back to the economy is demonetisation, as it is said to be a hard step to curb all the black money from the structure. The effects are not yet scrutinized but various top ranking economists are positive on this note.
In this same orientation, the FMCG giant Hindustan Lever has surfaced with its comments over both GST and demonstration with equal concern. HUL said that “market growth would be “adversely impacted” in short term due to the ongoing demonetization scheme of the government and GST but in the long term it would be “win-win for everyone.”
“In the short term, market growths to be adversely impacted for a few months, But the company strongly believes that demonetization and GST are a significant growth driver for India and a win-win for everyone,” it added. According to the company, demonetization and GST would help industry with “simpler and effective compliance” and “level playing field”.
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HUL also said that “It would benefit the country with “higher investment-led growth” and the government with “lower fiscal deficit and higher tax base”. “Consumers will benefit from lower inflation,” HUL was indicating that lower cash in the hands would be watch time for the consumers and will only pick up their basic necessities on the priority.
HUL added that “trade would be down due to a liquidity squeeze and there would stocking of the material as a short-term measure.” According to the company, gradual improvement in the market impact is expected to be led by urban segment and would depend on liquidity build up across the chain.
Its effect would be changed over the topographies yet the wholesale exchange would be affected the most. Besides, in the long separation courses, there would be calculated effects. In a presentation copy which was submitted to BSE, HUL mentioned that “Speed of recovery will be dependent on liquidity build up across the chain.”
On November 9, the government pulled back Rs 500 and Rs 1,000 notes as a major aspect of a crackdown against black money and individuals have been confronting money crunch. The legislature is additionally meaning to commence GST from April one 2017. The Goods and Services Tax (GST) will subsume extract, benefit duty, VAT and other nearby duties.
