80% of headwinds behind us; GST cut already priced in by markets, says Sunil Singhania

The latest GST rate cuts, alongside earlier income-tax reductions and lower lending rates, could inject close to Rs 10 lakh crore of liquidity into the economy, said Sunil Singhania, founder of Abakkus Asset Manager in an exclusive conversation with Moneycontrol. He sees this as part of the government’s broader push to sustain GDP growth at 7% and simplify the indirect tax structure by reducing slab complexity.

Macro boost
Singhania calculates that lower GST, tax cuts, and softer EMIs translate into roughly Rs 20,000 crore per month of additional consumer liquidity. Combined with a new RBI governor-led infusion of over Rs 8 lakh crore and another Rs 2–2.5 lakh crore through CRR cuts and rate reductions, the policy thrust sets up a strong macro backdrop. “Eighty to eighty-five percent of the headwinds are behind us,” he said.

Corporate & GDP Outlook
Corporate profits, which grew just 3% a year ago, are now recovering. GDP has climbed from 5% to 6.5%, with a one-off spike of 7.8% unlikely to sustain but still reflective of momentum. He expects September earnings to look optically strong given last year’s weak base, while December and March could deliver a meaningful turnaround as stimulus effects kick in.

Consumption Dynamics
While consumption is set to benefit, Singhania cautioned that staples face structural challenges: penetration levels are high, inflation is low (limiting value growth), and new D2C brands are steadily eating into market share. Discretionary categories, however, look brighter. Autos in particular stand out: a 10% GST cut plus potential 2–3% relief if lending rates are passed on could materially lift demand, especially during the festive season. Tractor sales are already growing 20–25%, backed by a strong monsoon and rural recovery.