GST rate cuts boosts Festive Spending, consumption likely to stay strong: FM Sitharaman

GST rate cuts boosts Festive Spending, consumption likely to stay strong: FM Sitharaman

NEW DELHI: Finance Minister Nirmala Sitharaman on Saturday said that the recent reduction in Goods and Services Tax (GST) rates has boosted sales and consumer spending across sectors.

Addressing a press conference on the government’s ongoing ‘GST Bachat Utsav’ campaign, she expressed confidence that this upward momentum in demand would continue well beyond the festive season.

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“GST rate reduction has resulted in an increase of purchases. The consumption drive will continue… We are convinced that on every such item, benefits are being passed on by companies,” Sitharaman said, adding that in some cases, businesses have passed on higher-than-expected benefits to consumers following the rate cuts announced on September 22.

The GST Bachat Utsav, launched by Prime Minister Shri Narendra Modi last month, is a 100-day campaign aimed at ensuring that consumers directly benefit from reduced tax rates.

FM Sitharaman said the government has been tracking price reductions across 54 essential items, noting that in several cases, price drops have exceeded the intended average cut.

“For example, shampoo prices fell by 12.36% compared to the expected 11.02%, and household goods made from iron, steel, and copper saw a 10.24% decline — more than the targeted 6.25%,” she highlighted.

Finance Minister pointed out that the impact of the GST rate cuts is visible across key consumer sectors such as automobiles and durables.

“Three-wheeler dispatches rose 5.5% year-on-year, two-wheeler sales touched 21.6 lakh units, and passenger vehicle dispatches reached 3.72 lakh in September,” she said, citing Hero Motors, which reported its highest-ever monthly sales last month. Sales of air conditioners doubled, while television sales rose 30–35% on the day the new GST rates came into effect.

Commerce and Industry Minister Piyush Goyal, who joined the press briefing along with IT and Electronics Minister Ashwini Vaishnaw, said the move has already been recognized internationally. “The IMF has taken note of India’s policy measures and upgraded the country’s growth forecast,” he said.

“Indirect tax directly impacts 140 crore Indians. With GST cuts worth ₹2.5 lakh crore, the multiplier effect is clearly visible in the economy,” Goyal added, calling the reform a key driver of growth and confidence in India’s consumption-led recovery.

Sitharaman focuses that the GST rate reduction is not merely a corrective measure but a “conscious decision reflecting cooperative federalism between the Centre and the GST Council” — ensuring that the benefits of financial reforms are passed directly to the people.