THE GST STIMULUS

From milk and soaps to mobiles, TVs and small cars, GST cuts promise festive relief—can spending power truly turbocharge India's growth?

- By ASHISH SINHA

WHEN PRIME MINISTER NARENDRA MODI took the podium on 15 August this year, he dropped a hint that many economists had long been expecting. In his Independence Day address, he spoke about revisiting the Goods and Services Tax framework, which had completed eight years since its introduction. “The government will bring Next Generation GST reforms, which will bring down tax burden on the common man. It will be a Diwali gift for you,” he had said. And he kept the promise. Modi described GST as a landmark reform that unified the country's tax system, but admitted that simplification and rationalisation were due, especially in light of changing consumer behaviour and India's ambition to become a five trillion-dollar economy. That signal set the stage for what Finance Minister Nirmala Sitharaman announced a few weeks later - a sweeping revision in GST rates that will come into effect on 22 September.

The new structure reduces the number of slabs and makes a long list of goods cheaper. For ordinary Indians, the message is clear - this festive season is going to feel lighter on the wallet. Essentials like roti, paratha, paneer, and ultrahigh temperature milk have moved into the zero per cent slab, giving household budgets some breathing space. Products like butter, cheese, ghee and dairy spreads, which were earlier taxed at 12 to 18 per cent, now attract either five per cent or none at all. Even chocolates, cookies, namkeens, dry fruits and cereals, once firmly in the 18 per cent category, have been brought down to five per cent.