New Delhi, Sep 3 : The upcoming changes to the Goods and Services Tax (GST), likely to be announced on Thursday, should trigger a decisive, consumption-led turn in India's growth cycle, a report said on Wednesday.

This adds to earlier stimulus measures like welfare spending and monetary easing, and has secondary benefits like formalisation.

According to Emkay Global Financial Services' report, India's earnings cycle is bottoming out, and this could be the catalyst for an upgrade cycle to kick in.

"We maintain our September Nifty target at 28,000 and stick to Discretionary as our biggest overweight. The best way to play the cycle is through the auto ecosystem ' OEMs, ancillaries, and lenders," the report maintained.

"We expect GST 2.0 to be a game-changing reform and not just incremental adjustments," it added.

The benefits are three-fold -- an immediate boost to consumption, accelerated formalisation of the economy, and greater efficiencies from lower regulatory burden.

The 56th GST Council has begun its discussion on rates rationalisation and on proposals to cut levies on life and health insurance premiums, with rate notifications likely by the third week of September, according to reports.

Consumers and industry are closely watching as the GST Council takes up the long-pending issue of GST rate rationalisation, a move that could sharply reduce prices of daily essentials as well as premium products.

According to market watchers, in the near term, market sentiment hinges on the outcome of the GST Council meeting, with traction on consumption-oriented stocks and sectors.

The upcoming GST 2.0 reforms will boost consumer sentiment, spur demand, and simplify compliance.

According to Ajit Mishra, SVP, Research, Religare Broking Ltd, markets on Wednesday moved higher and gained over half a per cent, supported by optimism around the GST Council meeting.

"With participants awaiting clarity from the GST Council outcome, we continue to view the index as being in a consolidation phase. Any favourable announcements from the GST Council could act as a near-term catalyst," he mentioned.

/IANS