GST 2.0 rationalisation expected to boost consumption

The recent rationalisation of Goods and Services Tax (GST), also being referred to as GST 2.0, is expected to provide a significant boost to consumption in the current financial year, according to a report by the State Bank of India (SBI).

- DG NETWORK

The report estimated that the GST 2.0 regime, while involving an average revenue loss of Rs 85,000 crore, has resulted in a substantial consumption boost of Rs 1.98 lakh crore. It stated "The GST 2.0 regime...is estimated to have boosted consumption by Rs 1.98 lakh crore."

The report also highlighted that when combined with the income tax cuts announced earlier, the overall impact is even more pronounced. Together, both measures are expected to add nearly Rs 5.31 lakh crore to consumption expenditure in the economy, which translates into around 1.6 per cent of GDP.