GST cuts reaching consumers, boosting festive demand: FM Nirmala Sitharaman on Dhanteras

Finance Minister Nirmala Sitharaman on Dhanteras said the impact of recent Goods and Services Tax (GST) rate reductions has been “remarkable,” with the benefits being effectively passed on to consumers across key product categories.

Speaking at a joint press conference with Commerce Minister Piyush Goyal and Electronics & IT Minister Ashwini Vaishnaw, Sitharaman said the government has been tracking 54 essential items to ensure that companies and retailers transfer tax savings to end-users. “For every item I have monitored that affects citizens’ daily lives, the weighted average of the reduction is being passed on — and in some cases, even more,” she said.

The minister added that while a few products, such as high-end Portland cement, saw a smaller-than-expected pass-through, the overall outcome has been positive, helping lower household expenses and boost consumption. Sitharaman described the GST adjustments as part of the government’s next-generation tax reforms, aimed at making indirect taxation simpler and more consumer-friendly.

Sharing data to illustrate the reforms’ impact, she highlighted a surge in demand across multiple sectors. Three-wheeler dispatches grew 5.5% year-on-year, while two-wheeler sales touched 21.6 lakh units in September. The passenger vehicle segment recorded 3.72 lakh dispatches, driven by a festive surge in the last nine days of the month.

Consumer durables also reported strong growth: air conditioner sales doubled on the first day of the GST cut, while a leading TV manufacturer saw 30–35% higher sales. LG India reported exponential growth during the Navratri season, and the FMCG sector posted broad-based gains.

“The GST rate reductions have not only provided relief to consumers but also reinvigorated demand,” Sitharaman said, calling it “a festive boost built on fiscal prudence and economic confidence.”

Goyal hailed the recent GST rate cuts as the “biggest GST reform since Independence,” calling it a transformative step that will have a multiplier effect on India’s economy. He said the reforms are already stimulating consumer spending, encouraging fresh investments, and accelerating infrastructure growth. Goyal added that most e-commerce platforms have swiftly passed on the tax benefits to customers, helping lower prices and boost festive sales across sectors.

Echoing the sentiment, Electronics and IT Minister Ashwini Vaishnaw said the festive season has seen record-breaking sales, with 20–25% growth across key electronics segments such as smartphones, air conditioners, washing machines, and set-top boxes during Navratri. He credited the GST reforms for helping ease food inflation, noting that food prices have been in deflation for the last four months.

Vaishnaw also highlighted India’s expanding electronics manufacturing ecosystem, which continues to grow at a double-digit pace and now employs nearly 25 lakh people directly. In a major milestone for India’s semiconductor ambitions, he announced that the country’s second semiconductor fabrication plant has officially commenced production, marking a new phase in India’s drive toward technological self-reliance.