In a landmark amendment to the Indian tax regime, India’s upper house or the Rajya Sabha passed the Goods and Services Tax bill which streamlines and simplifies taxes for the entire country.

In effect, the GST brings India, a US$2 trillion (£1.5tn) economy with 1.3 billion consumers, into a truly single market. “No country of comparable size and complexity has attempted a tax reform of this scale,” Harishankar Subramanian, of Ernst and Young told the BBC. The GST bill which had been pending in parliament for a few years, finally got passed allowing companies to regulate their taxes between India’s 29 states better.

The new bill will upgrade India’s tax system on par with 21st Century companies needs, enabling Asia’s third largest economy a strong tax regime going forward. It will therefore ensure businesses can expand nationwide. Freight trucks will now be able to move quickly across India, rather than spending hours idling at multiple checkpoints filling in forms and making tax payments when they travel between states.

Additionally, the overall tax rate is expected to come down, from its current rates. News reports peg the GST rate at between 15 percent and 18 percent. “If you add all the taxes together, today this is almost 27-32 percent… With GST coming in say at 18-19 percent zone… that is still a difference of 8 percent to 10 percent. Large part of that will eventually get passed on to the customer,” Ashish Goel, co-founder and CEO of online furniture retailer Urban Ladder, told NDTV Profit.

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Indian students are increasingly bearing the brunt of being caught between India and China. Its a chasm that runs deep and has been mishandled by both governments.

There are two types of Indian students in China. Medical students whose numbers have swelled to 14,000 this year and language students who are being lured by scholarships to Chinese universities to study Mandarin and become China’s soft power ambassadors. Various issues exist between the two.

Recently a violent skirmish between two gangs of medical students in China left one severely wounded and hospitalized. The incident brought to light not only the vengeance Indians are weilding against each other but also their problems. Indian medical students who go to China because Indian medical universities are bursting at the brim, return home to find their Chinese qualifications are not recognised in India, in addition, they face language and food problems as well as being ragged by senior Indian students. While ragging is a criminal offence, none are reported to the Indian Embassy or Consulates in China for fear of repercussions. This has aggravated the problem as the students feel they are above the law.

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Two weeks before China celebrates her singles day on 11/11, Beijing announced that she was going to abolish the one child policy altogether. Enforced in 1979 to curb China’s growing population and ensure a good standard of living for a nation aspiring to excel, the one child policy brought in sweeping changes for Beijing.

However 68 years later, having reduced China’s population by almost 400 million child births (the estimated prevented births if the policy wasn’t in place), President Xi Jinping and his team decided to abolish the rule in order to boost the working age population for the next generation. The fear that China would get old before she gets rich held true and Beijing was finding it hard to pay retirement bills with a falling number of workers. The country’s working age population fell 3.71 million in 2014.

The United Nations projects that China will lose 67 million workers from 2010 to 2030. At the same time, China’s elderly population is expected to soar from 110 million in 2010 to 210 million in 2030, and by 2050 will account for a quarter of the population, according to the U.N. China’s population, the world’s largest, rose to 1.34 billion in 2010, according to census data. Additionally, social unrest was growing with a large number of unmarried men and women who had to work doubly hard to support extended families admist growing consumption levels.

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As China gets older faster than it gets richer, her pharmaceutical industry is under threat. Owing to sky high prices of medicines, thrust onto citizens by local hospitals, the Central government has cracked down on drug prices in a policy to be implemented from June 1st, 2015. In the recently released pilot program, Beijing has introduced plans to abolish drug price mark-ups in more Chinese hospitals and to give hospital administrators greater clout to negotiate price cuts with suppliers.

To further avert corruption that has severely tinged the pharma industry in China, China’s State Council, announced this month that a pilot programme to reform the hospital finance system would be extended to 100 big cities this year, with the goal of covering all urban public hospitals within two years. The pilot programme scraps the 15 percent mark-up that Chinese hospitals typically place on drug sales, providing them with 40 percent or more of their budgets.

For anyone who frequents the India-China route and has local friends on the other side of the bamboo curtain knows that cancer drugs from India are in high demand in China primarily because they are typically 1/6th – 1/10th the price in India. Corruption, riddled with a pharmaceutical industry that is flamed by hospitals being the sole dispenser of drugs in China has created an illicit circle wherein the prices of medicines are highly inflated.

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India and China’s recent crack down on black money has sent shock waves across the world.

With illicit money stocked in banks from Switzerland to Singapore, New Delhi is enforcing strict policies and tighter regulations to bring black money back to Indian shores. Meanwhile Since President Xi took over, Beijing has also come down heavily on evaders in a major clampdown on both government officials and businessmen.

According to a report by Global Financial Integrity, Russia and China scale above India in the illicit funds that sit overseas. According to the report, India’s total (US$95 billion) is still less than 40 percent of China’s US$250 billion in illicit fund exports in 2012 but it’s gaining ground. Ten years earlier India’s total was only 20 percent of China’s, according to data from the Washington DC-based research and advocacy organization. Russia was on the top with US$123 billion in 2012.

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A small yet highly significant Chinese delegation of six members led by Vice minister Xia Yong came to New Delhi last week to understand India’s rural reforms policy with special focus land reforms leading to greater land rights for farmers, the reform of the household registration system,  which is outlined in the governments 60-point reform agenda

Land reforms which have been high on President Xi Jinping’s agenda are one of the major issues that Beijing has decided to focus on this year. With the number of rural migrants moving to cities on the rise, infrastructure and basic resources are being strained. It is estimated that every year, 20 million Chinese move into cities. That is 1.8 million a month, the equivalent of the cities of Hamburg or Vienna. As a result, sosts for basic amenities have already gone up and Beijing recognizes land reforms as a priority now.

According to the Times of India, the Chinese delegation met with Additional secretary of the Legislative department Mr. Sanjay Singh to learn how land ownership rights are regulated in India, including compensation paid on land acquisition, and the Indian government’s rehabilitation and resettlement policies.

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As nations battle the future of food security at the World Trade Organisation in Bali, China and India are going though dynamic social changes of their own – while one grapples with rethinking the education system, the other is realizing the strength of her women.

In India a spate of women are rising up against harassment meted out to them in the workplace, home or on the streets. The slew of rape, molestation and sexual harassment cases being filed in India,  is on the rise and feminists attribute it to the growing voice of women who are slowly yet surely making themselves heard.

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Stock markets in Hong Kong and Shanghai jumped to a two and a half year high on news that China will be amending her one child policy, abolishing labour camps, and tweaking  land, market, financial and social welfare reforms. The changes announced as part of Beijing’s third Plenum reforms are expected to be a precursor of the good times ahead. Much needed changes, announced at a time when the initial reforms disappointed China watchers, the more recent reforms seek to bail China out of her doldrums and escalate her progress. As a sign of what the people felt – the Chinese stock market which has been one of the worst-performing world markets over the last three years or so with valuations remaining at a substantial discount to global and emerging market peers, is now expected to witness a soaring streak especially in baby and consumer products.

The third Plenum, expected to set the economic vision for China’s next decade was watched eagerly by all with a stake in the nation. Expected to not only alter the fortunes of the billion plus people within Chinese territory, but more than half the world, the reforms announced at the end of the three day session, just before the weekend threw everyone in a tizzy. Having just digested the news, here is a brief of the five major reforms expected and their impact on domestic, Indian and International markets.

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Both India and China saw a seven month spike in inflation rates in the ninth month of this year. Reuters reported on both nations – China’s annual consumer inflation rate rose to a seven-month high of 3.1 percent in September as poor weather drove up food prices, limiting the scope for the central bank to maneuver to support the economy even as exports showed a surprise decline. Inflation in India unexpectedly hit a seven-month high in September as food prices climbed, increasing the odds for yet another central bank interest rate hike even as the economy stumbles through its worst crisis since 1991.

With spending on food being the prime expense of an average Chinese and Indian’s disposable income, this hike in inflation rates is sure to pinch the common man. In India where menu’s have already altered to keep out the once essential onion, consumers are gaining extremely weary of what they eat. Prices of onions jumped 322 percent annually as crop supply dropped and wholesale merchants hoarded the bulb for higher prices.

Food prices in India rose to an annual 18.40 percent last month, the fastest clip since July 2010 and triple the 6.1 percent rise seen in China, according to Reuters. In China, Food prices gained 1.5 percent in September from August due to droughts and floods in some areas, pushing up the CPI by 0.51 percentage points, Yu Qiumei, a senior statistician at the bureau, said in a statement.

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As China and India play tug-of war in re-balancing their economies, Inchin Closer takes a look at the real growth engines in both countries — India’s Middle class and China’s Rural mass.

Birds of Gold as dubbed by the Mckinsey Global Institute, for their ability to sway consumer companies, public opinion and pull the weight of the economy simultaneously, the bulk of our populations, do not only dictate domestic decrees but also international tet-a-te’s. While India’s middle class, also sways political opinion, China’s rural junta doesn’t have this privilege. Yet, this is where the real markets lie, the untapped potential that producers churn factories for and investors pump in money for in the hope that one day, these masses will will reap them rich dividends.

An ambiguous title, India’s middle class is one that is defined on an income parameter which varies depending on which economic group you talk to, similarly, China’s rural masses too vary depending on which social analyst you speak with. Here at Inchin Closer we will look at their economic impact depending on their psychological position of being our real growth engines.

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