Lower GST boosts consumer spending in the festive season

The impact of the recently implemented Goods and Services Tax (GST) reform is becoming increasingly visible on the ground, with lower tax rates encouraging consumers to spend more, particularly amid the festive season.  

Customers across the nation feel a difference in prices in essential products during the festive buying season.

Residents in Chhattisgarh's Surajpur told IANS that the reduced GST has made several household products more affordable. "After the new GST rates were implemented, I decided to buy a refrigerator. Due to the lower tax, I received a discount of around Rs 2,000, which I used to purchase a new mixer," a resident said.

He described the move as a “very good decision by the (PM Narendra) Modi government,” adding that it is benefiting the general public on a large scale.

Another resident said that the lower GST has helped families make big-ticket purchases within the same budget. “We just bought a scooter and saved a considerable amount. With Diwali approaching, the reduced tax is allowing us to shop more freely,” he said.

Local traders also confirm a rise in demand.

A shopkeeper in Surajpur noted that electronic goods have become cheaper by up to 10 per cent following the GST cut. "Prices have come down, and customers are buying more. Sales are improving steadily," the shopkeeper stated.

Earlier, the positive consumer sentiment was reflected in India’s broader economic outlook. The International Monetary Fund (IMF), in its latest 'World Economic Outlook', revised India’s GDP growth forecast for FY2025-26 to 6.6 per cent from 6.4 per cent earlier.

The IMF attributed the upward revision to the government’s comprehensive GST reforms, reduction in tax rates on goods and services, and stronger-than-expected performance of the economy in the first quarter.

Economists believe that with festive spending rising and consumer demand strengthening, India’s growth momentum is likely to remain robust through the rest of the fiscal year.

Picture Courtesy: IANS