TMS Ep313: GST share of states, China plus one, Markets, FPO

In the run-up to the upcoming Union Budget, finance ministers of some states -- mostly ruled by opposition parties -- have demanded a 10 percentage point jump in their share of revenue from GST collections. From the current 50%, they want it to be increased to 60%. So what is behind this demand? And what will be its impact if implemented? 

India’s robust GST collections clearly point towards one thing. That its economy is growing at a good pace. Global companies too are increasingly seeing India as an attractive investment destination. A series of developments in China over the last three decades, including the gradual increase in labour costs, have prompted companies to look for alternative destinations. And the recent lockdowns and protests are giving fresh impetus to China-Plus-One policy. So will India be able to reap the benefits of its demographic dividend? And, will it score over its Southeast Asian rivals? 

Meanwhile, foreign portfolio investors returned to Dalal Street after over two months, pumping over 31,000 crore rupees into domestic stocks till November 25th. Domestic investors have also moved past inflation and rate-hike worries, which is enabling benchmark Sensex and Nifty indices to continue to scale fresh highs. This bullish momentum has spread to the broader markets, too. But, will it sustain? 

Last week, billionaire Gautam Adani said that his flagship company will raise capital worth 20,000 crore rupees via FPO. FPO, or follow-on public offer, is one of the many means through which corporates finance their expansion plans, or pare debt. In today’s podcast, we explain what is a FPO, and if investors should subscribe to it?