Indian transporters' shares slide as tax reform bill hits roadblock

Allcargo Gati

09/12/2015 10:29

By Aditya Kalra and Abhishek Vishnoi 
    NEW DELHI/MUMBAI, Dec 9 (Reuters) - Shares in Indian 
logistics companies fell on Wednesday as hopes faded for a quick 
approval by lawmakers of a key tax reform seen as beneficial to 
the firms, after the main opposition Congress party disrupted 
parliament for the second day in a row. 
    Prime Minister Narendra Modi's long-awaited national goods 
and services tax (GST) is expected to spur investments and boost 
economic output by simplifying a thicket of local levies. But 
regular opposition protests this year has delayed its passage in 
parliament. 
     With Congress party politicians forcing the session to be 
adjourned in the upper house by shouting slogans on Wednesday, 
shares of logistics companies took a hit. 
    Transport Corporation of India  TCIL.NS  fell 8.8 percent, 
Gati  GATI.NS  dropped 8 percent, while Allcargo Logistics 
 ACLL.NS  fell 5.2 percent. 
    The broader 50-share NSE index  .NSEI  ended down 1.2 
percent, extending its losses for the week to 2.2 percent. 
    "The logjam in the winter parliamentary session and subdued 
corporate earnings have added to the cautious mood," said 
Radhika Rao, a Singapore-based economist at DBS. 
    Modi's slow progress on economic reforms has worried 
investors, and he could struggle to implement GST by the April 
deadline if the bill is not passed in the current parliament 
session that ends on Dec. 23. 
    Aneesh Srivastava, chief investment officer at IDBI Federal 
Life Insurance Co., said there was "less chance" of the GST bill 
being passed in the current session. 
    The latest row in parliament stems from a New Delhi judge's 
order that Congress president Sonia Gandhi and her son Rahul 
must appear in court next week, in a case brought by a member of 
Modi's party.      
    The Gandhis have accused the federal government of a 
"political vendetta" against them, a charge Modi's officials 
deny.  
    Congress says the protests are not aimed at blocking the 
GST, but such roadblocks have raised worries that Modi, despite 
striking a conciliatory note by meeting Sonia Gandhi last month, 
will now struggle to reach a consensus on the tax bill.   
    "The government should approach the opposition again to find 
a way," said Satish Misra, a political analyst at the Observer 
Research Foundation.  
    Sonia Gandhi and her son Rahul lead the Nehru-Gandhi dynasty 
that governed India for most of its post-independence era after 
1947.  
    The legal case against the Gandhis, brought by BJP member 
Subramanian Swamy, alleges the mother-son duo used $13.5 million 
of their party's funds to pay debts accrued by a now defunct 
newspaper business. The Gandhis deny wrongdoing. 
    The Gandhis are due to appear in court in New Delhi on Dec. 
19. 
 
 (Editing by Frank Jack Daniel and Muralikumar Anantharaman) 
 ((aditya.kalra@thomsonreuters.com; +91-011-41781009; Reuters 
Messaging: aditya.kalra.thomsonreuters.com@reuters.net)(Twitter: 
@adityakalra)) 
 
Keywords: INDIA POLITICS/