GST Rate Cut Impact Will Sustain Beyond Festive Season: FM Nirmala Sitharaman

Union Finance Minister Nirmala Sitharaman on Saturday asserted that the positive impact of the recent GST rate cuts would continue even after the festive season, arguing that India’s “consumption story” remains strong.

Addressing a joint press conference alongside Commerce Minister Piyush Goyal and IT Minister Ashwini Vaishnaw, Sitharaman said the rate cut benefits have begun reaching consumers, leading to record sales across key sectors.

“The GST cut will benefit consumers on day-to-day items. The consumption story will continue,” Sitharaman said, dismissing speculation that the sales surge was driven only by pent-up demand.

She, however, declined to predict whether the sales spike would directly translate into higher GDP growth for the current fiscal.

Goyal cited a 9% year-on-year rise in September GST collections as proof of sustained economic momentum. He noted that despite Prime Minister Narendra Modi’s August 15 announcement of tax reductions, there were no signs of deflationary impact on sales.

Backing the optimism, Vaishnaw projected that overall consumption may rise by over 10% this fiscal. “Last year, GDP was ₹335 lakh crore, with ₹202 lakh crore from consumption. This year, we expect nearly ₹20 lakh crore more in consumption,” he said.

The Finance Minister added that the government is monitoring prices of 54 essential products to ensure the benefits of the revised tax structure are passed on to consumers. She revealed that 3,169 complaints related to GST price anomalies have been received, of which 3,075 have been forwarded to concerned authorities for action.

“More than expected tax reduction has happened, and consumers have ended up getting greater benefits than anticipated,” Sitharaman concluded.