Due to lethargy in the Indian market, investors were facing a lot of difficulties for some time. But after the announcement of Prime Minister Narendra Modi to make GST easy and economical on 14 August, there has been a tremendous rise in shares of companies associated with auto and consumption. Due to this boom, the stock market has registered an increase of about 6 lakh crore rupees within a month.
The Nifty Auto Index has gained more than 11% lead last month. According to an ET report, in the meantime, the total market value of auto companies has now crossed Rs 5.13 lakh crore. The special thing is that the shares of Eicher Motors, who created Royal Enfield, increased by 19%, while India’s largest car manufacturer Maruti Suzuki shares saw a rise of 18%.
Impact of GST reform on auto sector
The government has reduced the tax rate on small cars from 28-31% to 18% under the new GST rules to be implemented from 22 September. At the same time, the rate of GST has been reduced to about 40% on the big SUV. Similarly, GST rate on two -wheelers with a capacity of 350 cc has been reduced from 28% to 18%. This change will reduce the prices of vehicles, which will benefit buyers and increase sales.
Consumer durables products also increased demand
According to an ET report, the impact of GST cut was not limited to the auto sector alone. The Consumer Durables sector has also performed tremendously. The Nifty Consumer Durables Index has increased by 5.6%, causing the market value of this sector to reach above Rs 78,000 crore. Footwear company Bata India shares have gained up to 20%. The government has reduced GST from 12% to 5% on footwear priced below Rs 2500.
This change in India’s consumption sector indicates a large -scale restructuring. The announcement of GST reform on Independence Day has accelerated the consumer market, which is benefiting both investors and companies. It is believed that the effect of this boom in the next few months will be even more clear, which is a positive sign for the economy.