Recap 2017-18 Major Events That Happened This Financial Year in India

March is usually a frenzied month for the corporate sector. Long hours in office, endless trips to banks, numerous discussions with tax consultants & chartered accountants and completion of all the business commitments summarizes the March madness. It will all end today. A lot has happened in the corporate landscape in India this financial year. From macro events, micro developments to global headwinds, the country has seen it all.

Major Events in India in 2017-18

Here’s a quick roundup of all that happened in the business and economic landscape in financial year 2017-18:

Goods and Service Tax (GST)

Rolled out in July 2017, the GST took India by storm. Implementation of GST was a much debated topic and companies spent sleepless nights overhauling their existing systems to align with the new tax regime. After almost a year, GST has garnered mixed response. On the upside, there are no hidden taxes and the complex labyrinth of taxes has been simplified. Thanks to the Input Tax credit, the cascading effect of taxes has reduced and price rise has been kept in check. However, on the downside, many Indians are complaining that GST has too many tax slabs which makes it confusing. Efforts to reduce the slabs are in process and the positive effects of GST are yet to seen in full form.

Banking Sector Frauds

As reported by proxy advisory firm Institutional Investor Advisory Services (IiAS), the Indian Banking sector has lost about Rs 18,170 crores to frauds in Financial Year 2017-18. Top banks such as PNB, ICICI, Bank of Maharashtra, HDFC etc. have large number of fraud cases. This calls for an urgent requirement to tighten internal financial controls for these banking behemoths. The audit quality needs to be strengthened by plugging in process gaps and rationalisation checks and balances.

Record Public Issues

The financial year 2017-18 witnessed mobilisation of Rs 1.77 lakh crore through public issues.  This is even more than the highest which was seen back in 2009-10. The largest IPO of the year was that of General Insurance Corporation which raised Rs 11,257 crore, while the largest SME IPO of the year was of East India Securities which raised a capital of Rs 88 crore.

Fading sheen of the Indian IT sector

Once touted as the sunshine sector, the Indian IT sector has apparently bitten dust. Though it is too early to conclude anything, the developments last year have been far from encouraging. The Indian IT biggies were in news for all wrong reasons. While mass layoffs made them unpopular, underlying issues such as curb on US H1B Visa, dependence on US and EU for business, stronger Rupee and technological disruption have led to the downhill journey of the Indian IT sector. Naturally, this weakness was reflected in their stock prices too.

Major changes in the telecom sector

2017-18 has been a landmark year for the Indian telecom sector. Post the launch of Reliance Jio in late 2016, the sector has witnessed intense competition, massive churning of subscribers and pricing wars. As a result there was consolidation like never before and there are only 3-4 big names left in the market. This is about to change the market structure from perfect competition to a more oligopolistic one. Experts opine that the future of Indian telecom will be marked by sustained structure and a competition for better services.

India’s economy grows faster than China

For the quarter ended December 2017, the Gross Domestic Product (GDP) in India grew 7.2%, overtaking China’s growth in the same period at 6.5%. This clearly indicated recovery of the nation following the slump in the first half of 2017. It is encouraging that the International Monetary Fund (IMF) predicts growth this year to be 7.4%.

The way ahead

The coming year is expected to be peppered by political anxiety on the domestic front due to various state elections in 2018 and general elections in 2019. Apart from this, the Indian economy will continue to remain jittery due to rising global oil prices and fears of interest rate rise in the US. However, India has strong fundamentals and it remains to be seen how it helps to withstand external pressures.