Winning Bizness Desk
Mumbai.Indian stock markets witnessed a strong revival after weeks of sluggishness. Investors, who had been facing challenges due to weak market sentiment, saw relief on August 14 when Prime Minister Narendra Modi announced simplified and affordable changes in the Goods and Services Tax (GST). The announcement triggered heavy buying in auto and consumption-related companies, adding nearly six lakh crore rupees to the market in just one month.
Auto index records double-digit growth
The Nifty Auto Index surged more than 11 percent in the past month, reflecting strong optimism in the sector. According to an ET report, the combined market value of auto companies has now crossed 5.13 lakh crore rupees. This growth has been led by a sharp rally in shares of top auto makers.
Eicher Motors and Maruti lead rally
Shares of Eicher Motors, the company behind Royal Enfield motorcycles, climbed as much as 19 percent, while market leader Maruti Suzuki gained 18 percent in value. Analysts said these gains show renewed investor faith in automobile demand and company fundamentals following the GST cuts.
GST cuts on cars and two-wheelers
Under the new GST rules effective from September 22, small cars will attract a reduced tax rate of 18 percent compared to the earlier 28-31 percent. Similarly, the GST on larger SUVs has been lowered to about 40 percent, making them more affordable. Two-wheelers below 350 cc engine capacity will now carry 18 percent GST instead of 28 percent, reducing prices and supporting higher sales.
Relief for buyers and manufacturers
The tax reduction is expected to bring direct benefits to buyers as vehicle prices will decline. This will not only boost consumer sentiment but also provide relief to manufacturers who have been struggling with slowing sales in recent quarters. The auto industry is hopeful of higher demand during the upcoming festive season.
Consumer durables join the growth wave
The benefits of GST reforms were not confined to automobiles. The consumer durables sector also showed sharp gains. The Nifty Consumer Durables Index rose by 5.6 percent, raising the sector’s market value to over 78,000 crore rupees. Analysts see this as an early sign of consumption revival across multiple categories.
Bata India benefits from footwear tax cuts
Shares of Bata India soared nearly 20 percent after the government cut GST on footwear priced below 2,500 rupees. The rate was slashed from 12 percent to just 5 percent, making these products more affordable for middle-class buyers. The move has encouraged higher sales volumes in the footwear market.
According to analysts, the GST 2.0 changes mark a large-scale restructuring of the consumption sector in India. The Independence Day announcement brought new energy into consumer markets, boosting both investor and business confidence. The reforms are expected to create sustained demand growth across auto, footwear, and consumer durables in the coming months.
Positive signals for the Indian economy
Economists believe the momentum triggered by GST 2.0 will be visible more strongly in the near future. Rising consumption and improved investor confidence are seen as positive signs for India’s economic growth. The reforms have opened a path for better demand cycles, giving relief to industries and consumers alike while strengthening the country’s overall market outlook.
Story in a nutshell
- GST 2.0 reforms gave fresh boost to markets
- Nearly six lakh crore added in one month
- Auto index surged more than 11 percent
- Eicher and Maruti shares gained sharply
- GST cut reduced prices of cars and bikes
- Consumer durables and footwear also benefited
- Reforms signal wider growth for Indian economy
