Weekend Reflections: a 5-min Read
In the week ending June 17, 2023, India witnessed a mix of positive and negative developments across various sectors. One of the major highlights was India's gross domestic product (GDP) reaching $3.75 trillion, surpassing several major economies and making it the world's fifth-largest economy. This growth reflects the significant economic progress India has made in recent years. However, the Federal Reserve's decision to pause the rate hike at its FOMC meeting had repercussions globally, leading to a decline in US stock indices and a spike in bond yields. This assumes significance as only during previous week, the Reserve Bank of India (RBI) decided to keep the repo rate unchanged at 6.5%, aligning with the trajectory followed by the FED.
Another important development was the introduction of norms for 'execution only platforms' (EOPs) in the mutual fund sector. EOPs can now charge a flat fee from asset management companies or investors for direct mutual fund investments. This move brings clarity to the rules around direct plans and is expected to attract more players into the market. However, concerns have been raised regarding the possibility of transaction splitting to earn higher fees.
In the stock market, MRF, India's largest tyre manufacturing company, became the first Indian company to see its share price cross the Rs 1-lakh mark. MRF has consistently outperformed the Sensex and demonstrated remarkable growth over the years.
On the taxation front, the Indian government is encouraging taxpayers to file their Income Tax Returns (ITRs) early. However, there are challenges in doing so, as the Annual Information Statement (AIS), which contains relevant data for ITR filing, may take until June 15 to accurately reflect all information. Taxpayers need to carefully cross-check the prefilled information with the AIS and Form 26AS.
Overall, India's GDP milestone, the FED's pause in rate hikes, the introduction of EOP norms, MRF's stock performance, and the challenges in early ITR filing were the key events in India during the week ending June 17, 2023.
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