The recent overhaul of the Goods and Services Tax (GST), along with earlier steps such as Reserve Bank of India’s rate cuts and tax relief in the Union Budget, has raised questions about how the economy will perform in the coming months.
With so many changes happening at once, both consumers and businesses are looking for signs of how markets will move till the end of the year.
The GST 2.0 changes have introduced a simpler two-slab system and major shifts in how goods and services are taxed. One of the most notable updates is the full exemption of GST on life and health insurance premiums from September 22. This is expected to bring relief to households, lower insurance costs, and help more people access financial protection.
Speaking on the possible impact on the market closing show on BT TV, Vinit Bolinjkar, Head of Research at Ventura Securities, said the domestic economy is set for a strong rebound.
“I believe that the domestic economy is going to boom big time. We have also had very good rainfall that you did not mention. So, I think it is going to be a very strong rural economic driven growth, urban economy is also going to pick up with that. And I think the sluggishness that we have seen in the numbers and the fallout of the exports, you know, tariffs that are there are more than going to be compensated. So, I think we will come back to the 10% nominal GDP growth which has slipped to 8.8% and that I think is going to be very, very strong growth going ahead,” he said on the Market Closing show on BT TV.
Markets reacted positively to the GST announcements, with shares across automobile, consumer, and cement sectors witnessing a rise. However, the indices later cooled off from the day’s highs, suggesting investors are waiting for more clarity on how quickly the benefits of GST 2.0 will reflect in demand.
Analysts say that the GST cuts, when combined with lower interest rates and the government’s focus on fiscal support, could provide a strong push to consumption. The rural economy is expected to gain from good monsoon rains, while the urban economy may see higher demand for consumer goods and vehicles due to reduced prices.
Overall, the combination of GST cuts, cheaper credit from RBI’s rate moves, and supportive budget measures are expected to lift the economy in the coming quarters. Both consumers and investors will be closely watching how these reforms translate into stronger demand, higher growth, and better earnings for companies.
