GST Rate Cut, SCO Meeting And Flash Floods — The Week That Was

From major GST reforms aimed at boosting consumption, to a crucial meeting of the Shanghai Cooperation Organisation that highlighted India's growing role in global affairs, the week was filled with high-impact news.

The nation's attention was also drawn to a series of significant economic and diplomatic developments. In the market, gold prices touched unprecedented highs. This week, several states grappled with devastating floods as well.

Here's a wrap-up of the top stories this week.

The GST Council announced the restructuring of the tax structure to a two-slab system of 5% and 18%. This decision, which will take effect from September 22, is a major relief and is expected to spur domestic consumption.

Items like hair oil, soap, shampoo and toothpaste will now attract a 5% GST, down from the earlier 18%. Additionally, consumer durables such as air conditioners and televisions have been moved from the 28% slab to 18%, making them significantly cheaper.

The cuts also apply to essential goods like medicines, agricultural machinery, and handicrafts, benefiting a wide range of sectors from healthcare to farming.

The Shanghai Cooperation Organisation or the SCO held a key summit this week, with the leaders of member states, including India, in attendance. A major outcome of the meeting was the approval to establish a new SCO Development Bank, a move spearheaded by China.

The bank is intended to boost efficiency and social development among member states and is being seen as a potential new multilateral platform in the EuroAsian region.

Prime Minister Narendra Modi, while attending the summit, outlined India's vision for the grouping, stating that the nation's engagement is guided by the principles of 'Security, Connectivity, and Opportunity'. He also spoke on the need for peace and tranquillity in the border regions and called for an end to "double standards" in the fight against terrorism.

Gold prices soared to a fresh all-time high of over Rs 1,07,000 per 10 grams this week, fuelled by a combination of global and domestic factors.

The rally was primarily driven by expectations of a US Federal Reserve interest rate cut, which makes non-yielding assets like gold more attractive to investors.

Geopolitical tensions, including ongoing trade disputes and conflicts, further bolstered gold's safe-haven appeal. Domestically, the continued weakness of the Indian rupee against the US dollar also contributed to the surge, making imported gold more expensive.

Analysts believe the yellow metal could see even further upside in the near term as economic and political uncertainties persist.

Heavy rains and severe flooding have devastated several states across India, with Punjab being the worst affected. The floods have submerged thousands of acres of farmland, impacting over 1,900 villages and claiming dozens of lives.

The state government has declared the entire state a disaster-hit zone, and rescue and relief operations are underway with the help of the Army, NDRF, and various NGOs.

Other northern states, including Himachal Pradesh, Jammu & Kashmir, and Uttarakhand, have also been battered by heavy downpours, leading to landslides and flash floods.

The rising water levels of major rivers and the forced release of excess water from dams have compounded the crisis, leading to mass evacuations and widespread damage to infrastructure.

The benchmark equity indices ended mixed on Friday. The NSE Nifty 50 settled 6.70 points or 0.03% higher at 24,741 and the BSE Sensex closed 7.25 points or 0.01% lower at 80,710.76. The Nifty fell much as 0.46% during the day, while the Sensex fell as much as 0.49%

This week proved to be a strong one for the Indian equity market, with most sectoral indices closing in the green.

The Nifty Metal index emerged as the top performer, gaining over 5% and leading the charge with significant contributions from stocks like National Aluminium, Jindal Steel, and SAIL.