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One month of GST: Demand improves, businesses show signs of revival

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One month after the rollout of GST uncertainty among traders, consumers and manufacturers seem to be settling down. While supermarkets and general stores have started showing the first signs of recovery, sectoral manufacturers, select traders hope that issues they face are addressed during the GST council.

One month of GST: Demand improves, businesses show signs of revival

Demand is returning to normalcy at general stores and consumer supermarkets. Shops owners who had refused to fill up inventories owing to uncertainty over pricing of commodities have started stocking up. Supermarkets have begun new purchases of stocks with fresh prices and clarity on taxation. This month, when you walk into the supermarket, expect price variations.

The situation is expected to stabilise completely by the first week of August when all stocks in the inventory are sold out. Consumer commodity distributors said that July was slow on purchases since old stocks were still in inventories. August is expected to be new and fast. Within a week, any gaps that are present in GST network among the wholesalers and stockists will be bridged.

While consumer demand bounced back to normalcy within two weeks of GST rollout, supply and demand from vendors took the time to stabilise. Currently, the trend is rapidly returning to normalcy. Vendors have proposed a simpler 'business-to-consumer' invoice structure to make things easy. Avenue Supermarts, the parent company of D-Mart said that supply from vendors is also returning to normal.

Manufacturing activity had taken a beating owing to lack of demand and fall in supply in June in anticipation of GST. Since demand was low in June, companies exhausted existing stocks. With demand returning from modern retail and stores, manufacturing companies are hopeful that the sector will pick up by August.

Investment strategists and portfolio managers have given things a month more to return to normalcy. Retailers seem to have familiarised themselves with the GST within the first half of July. Experts, however, believe that it may take at least three months for the sector to revive completely and function as before the GST regime.

In all, experts, traders manufacturers and vendors are hopeful about businesses picking up ahead of Diwali. Cross sectoral revival is predicted by Diwali this year.

OneIndia News

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