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

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

Speaking at a joint press conference with Commerce Minister Piyush Goyal and Electronics and IT Minister Ashwini Vaishnao, Sitharaman said the government is following 54 key elements to ensure that companies and retailers pass on tax savings to end-users. “For every item I monitored that impacts the daily lives of citizens, the weighted average of the reduction is passed along — and in some cases, even more,” she said.

The minister added that although some products, such as premium Portland cement, saw a lower pass-through than expected, the overall result was positive, which helped reduce household expenses and boost consumption. Sitharaman described the GST amendments as part of the government’s next generation tax reforms, which aim to make indirect taxes simpler and more consumer-friendly.

By sharing data to illustrate the impact of the reforms, it highlighted increased demand across multiple sectors. Three-wheeler sales rose 5.5% year-on-year, while two-wheeler sales reached 21.6 thousand 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 registered strong growth: air conditioner sales doubled on the first day of the GST cut, while a leading TV manufacturer saw sales increase by 30-35%. LG India reported tremendous growth during the Navratri season and the FMCG sector also posted broad gains.

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

Hailing the recent cuts in the GST rate as the “biggest GST reform since independence”, Goyal termed it a transformative step that will have a ripple effect on the Indian economy. He said the reforms are already stimulating consumer spending, encouraging new investments, and accelerating infrastructure growth. Most e-commerce platforms quickly passed on the tax benefits to customers, which helped bring down prices and boost festive sales across segments, Goyal added.

Echoing this sentiment, Electronics and IT Minister Ashwini Vaishnao said the festive season saw record sales, with 20-25% growth across key electronics sectors like smartphones, air conditioners, washing machines and set-top boxes during Navratri. He credited the GST reforms with helping mitigate food price inflation, noting that food prices have been in deflation for the past four months.

Vaishnaw also highlighted India’s expanding electronics manufacturing ecosystem, which continues to grow at an exponential pace and now directly employs nearly 25,000 people. In a major milestone for India’s semiconductor ambitions, he announced that the country’s second semiconductor manufacturing plant has officially commenced production, marking a new phase in India’s drive towards technological self-reliance.