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local taxes with a single unified value November: November:
added tax system to turn the country Demonetisation Hike in Cash
into world’s biggest single market. The Reserve Ratio
April 1 implementation deadline now The “surgical (CRR)
seems to be extended. A single market strike” against black
would cut logistics cost, increase tax money is a very The Reserve Bank of India (RBI)
revenue and raise inflation in the short bold move for the directed commercial banks to
term. With no consensus on sharing Indian economy. The Government had maintain an incremental cash reserve
of administrative powers, states are announced that all existing Rs 500 and ratio (CRR) of 100% as a temporary
now worried over demonetisation Rs 1,000 currency notes will no longer measure to absorb excess liquidity
impacting their revenues. 2017 will be legally tendered from midnight caused by demonetised-induced surge
decide the final shape of GST. of November 8, 2016. The move saw in bank deposits.
several problems in implementation
September: New along its way on grassroot levels along December:
RBI governor with the opposition attacking the Market
government. The growth would be hit Stabilisation
On September 4, only in short term but we will see long Scheme
2016, the government term benefits of demonetisation.
has appointed Urjit The Reserve Bank
Patel as the 24th RBI November: raised Market Stabilisation Scheme
governor. Victory (MSS) ceiling to Rs 6 lakh crore from
of Donald Rs 30,000 crore to manage extra
September: Trump liquidity from the system in view of
Merger of demonetisation.
Railway Budget On November 9,
with Union Donald Trump December:
Budget elected as America’s 45th president. OPEC Cut
Equity markets tumbled with the
Union Cabinet approves plan to do news of Donald Trump’s victory, but On December 10,
away with the 92-year old practice of a recovered fast as investors speculated 2016 OPEC and
separate Railway Budget. Rail budget that Trump’s victory may not be as non-OPEC members
merged with Union Budget from 2017- harmful as the market had predicted. reached their first deal since 2001
18. The year 2017 will see how Trump's to jointly reduce crude oil output in
visa policies impacting Indian IT order to check oversupply. OPEC
September: business. Trump has promised to agreed to slash output by 1.2 million
Surgical reduce the US corporate tax rate from barrels per day from January 1, 2017.
Strike on PoK 35 to 15%. This could lead to several Though it will brighten the prospects
American companies moving back for the energy industry and boost
On September 29, to the US, hitting the Make in India the economies of oil-rich countries,
the Indian army programme. Trump's threat to impose for consumers, however, it will mean
carried out surgical strikes on terror heavy tariffs on China and his general higher prices. The slump pushed
launch pads in Pakistan-occupied- hard stance towards will be favourable several oil-producing countries such
Kashmir to target terrorists waiting for Indian companies. as Brazil and Venezuela into severe
at multiple launch pads to cross over recession and saw Saudi Arabia
into India. November: cutting back on spending.
Pradhan
October: RBI Mantri Garib December: US
Rate Cut Kalyan Fed Rate Hike
Deposit Scheme, 2016
The RBI cuts its key US Federal Reserve
lending the repo Following demonetisation, the finally raised
rate by 25 basis government offered a new window for interest rates by 25
points to 6.25%. tax dodgers to come clean, allowing bps in December signaling that US
This was the first policy supervised them to declare hidden wealth by economy is improving. The Fed hinted
by the newly set up six-member paying an effective tax of 50% and that it could raise rates at a faster pace
Monetary Policy Committee (MPC). depositing 25% of undisclosed income in 2017. Most Fed officials now project
in a welfare programme called the three or more rate hikes in 2017. If Fed
'Pradhan Mantri Garib Kalyan Deposit will hike rates in future, there are fears
Scheme, 2016'. of increasing capital outflows from
India.
4 ARIHANT CAPITAL ¡ JANUARY 2017
