New Delhi: The Central government has given a major Diwali gift to the common citizen by reducing GST rates, economists said, noting that this move will not only boost demand during the festive season but also help offset the losses caused by recent US tariffs.
Economist Pankaj Jaiswal said: “This is truly a bumper Diwali gift from the government. The reduction in GST will help bring down inflation and strengthen domestic consumption. With the festive season already underway, this timely decision is very welcome.” (Also Read: What Are ‘Sin Goods’ And Why Do They Now Attract 40% GST? Full List Of Items Inside)
He noted that the US tariffs imposed last month had raised concerns about declining exports and reduced production. However, this decision ensures that such risks are minimised. With more disposable income in people’s hands, the economy is expected to get a positive push, he added.
CA Praveen Sahu added that the two-tier GST structure of 5 per cent and 18 per cent, with nearly 80 per cent of goods falling under the 5 per cent slab, will significantly benefit the general public. According to him, this reform will increase purchasing power and stimulate consumption. (Also Read: Popcorn Lovers Alert! GST 2.0 Brings New Rates For Salted vs Caramel– Details Here)
Economist Rajiv Sahu described it as the biggest tax reform since the introduction of GST in 2017. He emphasised that it will provide immediate relief to consumers, encourage spending, support industries, and strengthen the overall economy.
Echoing this, Chamber of Commerce General Secretary Aditya Manya Jain welcomed the reform, highlighting that reducing taxes on essential daily-use items will not only benefit consumers but also provide relief to investors and traders. He added that this step will help maintain the momentum of economic growth while addressing concerns arising from international tariffs.
Economist Ajay Rotti particularly appreciated the reduction of GST on health insurance from 18 per cent to zero. He called it good news for the public and a historic step that will also benefit MSMEs by lowering the costs of essential goods. This, he said, will boost consumption and further strengthen the economy.