{"id":24560,"date":"2017-08-03T18:59:55","date_gmt":"2017-08-03T23:59:55","guid":{"rendered":"http:\/\/olduvai.ca\/?p=24560"},"modified":"2017-08-03T18:59:55","modified_gmt":"2017-08-03T23:59:55","slug":"indias-economy-crashes-after-mind-bogglingly-inane-tax-system-strikes-back","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=24560","title":{"rendered":"India&#8217;s Economy Crashes After &#8220;Mind-Bogglingly Inane&#8221; Tax System Strikes Back"},"content":{"rendered":"<h3 class=\"title\"><a href=\"http:\/\/www.zerohedge.com\/news\/2017-08-03\/indias-economy-crashes-after-mind-bogglingly-inane-tax-system-strikes-back\">India&#8217;s Economy Crashes After &#8220;Mind-Bogglingly Inane&#8221; Tax System Strikes Back<\/a><\/h3>\n<section class=\"messages-holder\"><\/section>\n<section class=\"node node-type-story node-full node-nid-601034 ads-injected\">\n<div class=\"content\">\n<p>With just a hint of <strong><em>schadenfreude<\/em><\/strong>, we note that, following our discussion of <a href=\"http:\/\/www.zerohedge.com\/news\/2017-08-01\/how-destroy-economy-indias-new-tax-system-mind-bogglingly-inane\"><em>&#8220;how to destroy an economy&#8221;<\/em><\/a>,<strong> India&#8217;s Composite PMI collapsed to 46.0 in July &#8211; its lowest on record (well below the kneejerk lows after demonetization in November)<\/strong> as the &#8220;mind-bogglingly inane&#8221; new tax system and demonetization efforts continue to crush the poor and feed the wealthy.<\/p>\n<p><em>As Goldman Sachs notes<\/em> India&#8217;s Nikkei Markit services PMI contracted in July after reaching a 8-month high in June, following a decline of manufacturing PMI on Tuesday. <u><em><strong>The fall was led by a significant decline in new business, suggesting a worsened business sentiment after the GST implementation on July 1.<\/strong><\/em><\/u><\/p>\n<p><strong>Main points:<\/strong><\/p>\n<ul>\n<li>India&#8217;s Nikkei Markit services PMI contracted to 45.9 (the lowest reading since September 2013). Combined with the manufacturing PMI reported on Tuesday, <u><strong>the July composite PMI fell to 46.0, the lowest reading since March 2009.<\/strong><\/u><\/li>\n<li>Among subcomponents, <u><strong>the new business index fell the most to 45.2 (from 53.3 in June), reflecting disruptions caused by the GST. <\/strong><\/u><\/li>\n<li>As the press release from Markit Economics mentioned,<em><strong> \u201cMost of the contraction was attributed to the implementation of the goods &amp; services tax and the confusion it caused&#8221;.<\/strong><\/em><\/li>\n<li>The <strong>employment index for services fell to 48.9<\/strong> (from 51.8 in June).<\/li>\n<li>That said, the index for<strong> business expectations rose to a 11-month high to 62.3,<\/strong> suggesting optimism from services providers about the future once they have more clarity about the new tax system.<\/li>\n<li>The output price index rose to 54.6 (from 51.0 in June), while the input price index moderated to 51.7.<\/li>\n<li><u><strong>Overall, PMI data for July suggest a significant drag on new business activity post the GST implementation. <\/strong><\/u>That said, optimism expressed by both manufacturers and services providers about the future is encouraging and suggest a potential improvement in activity once businesses adjust to the new tax system.<\/li>\n<\/ul>\n<p>From 8-month highs to record lows&#8230; why does any one put any faith in the useless &#8216;soft&#8217; surveys?<\/p>\n<p><a href=\"http:\/\/www.zerohedge.com\/sites\/default\/files\/images\/user3303\/imageroot\/2017\/08\/01\/20170803_india.jpg\"><img loading=\"lazy\" decoding=\"async\" src=\"http:\/\/www.zerohedge.com\/sites\/default\/files\/images\/user3303\/imageroot\/2017\/08\/01\/20170803_india_0.jpg\" width=\"600\" height=\"314\" \/><\/a><\/p>\n<p>&#8230;click on the above link to read the rest of the article&#8230;<\/p>\n<\/div>\n<\/section>\n","protected":false},"excerpt":{"rendered":"<p>India&#8217;s Economy Crashes After &#8220;Mind-Bogglingly Inane&#8221; Tax System Strikes Back With just a hint of schadenfreude, we note that, following our discussion of &#8220;how to destroy an economy&#8221;, India&#8217;s Composite PMI collapsed to 46.0 in July &#8211; its lowest on record (well below the kneejerk lows after demonetization in November) as the &#8220;mind-bogglingly inane&#8221; new [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[238,376,422,15585,2783,15584,783,4318],"class_list":["post-24560","post","type-post","status-publish","format-standard","hentry","category-economics","tag-economic-crash","tag-goldman-sachs","tag-india","tag-nikkei-markit","tag-pmi","tag-tax-system","tag-taxes","tag-zerohedge"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/24560","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=24560"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/24560\/revisions"}],"predecessor-version":[{"id":24561,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/24560\/revisions\/24561"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=24560"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=24560"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=24560"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}