Budget 2018 issues: After note ban, tax base, digital drive up, realty down
BUDGET 2018On 8 November, 2016, Prime Minister Narendra Modi had announced the scrapping of Rs 500 and Rs 1,000 notes citing black money, corruption, terror funding as threats to the country. The immediate impact of the note-ban drive on economy was ambiguous at the beginning, considering the fact that the goalpost on its objective was
gradually shifted. However, a spin-off from demonetisation has been the overall increased emphasis on digital transactions and that channel has seen a multi-fold growth, along with new additions made in the taxpayers list.Increase in Tax Base Growth of new taxpayers has been greater than in the previous year. Addition to the reported taxable income (of these new payers) was Rs 106 billion.Rise in Digital Payments PoS and m-wallet transactions rose steeply, immediately after demonetisation. The volume of transactions continue to be higher, compared to the pre-demonetisation phase.Slump in Cement Supports the notion of negative impact of demonetisation on real estate. The overall index for the other 7 core industries seems to be only moderately affected.Hardest Hit Consumer durables does not seem to have recovered fully post demonetisation. GST may have had an additional impact.