New Delhi, Oct 27 – India’s new GST 2.0 rules are already boosting the economy, Finance Ministry data shows. The lower tax rates have lifted consumer spending, increased sales in key businesses, and lifted overall confidence among shoppers.
The report says the change, paired with holiday buying, is pushing the country toward stronger growth next months. Lower GST rates are encouraging people to buy more and businesses to invest, creating extra jobs across the economy.
In the second quarter of fiscal year 26, demand looks solid, with high‑frequency indicators pointing to a steady rise. Consumer durable goods — things like appliances and machines — grew 5.4 % in July and August, up from 2.6 % earlier in the year.
Fast‑moving consumer goods (FMCG) sales also stayed strong. Urban FMCG sales rose 4.1 % while rural sales jumped 8.4 %, showing that smaller towns and villages are buying more.
Holiday timing helped. Navratri celebrations and the GST cuts lifted consumer mood. Retail sales of cars jumped 34.8 % year‑on‑year during the holiday, driven by new buyers and upgrades to premium models. Two‑ and three‑wheeler sales rose 35.3 %, and tractor sales hit an all‑time high in September thanks to good monsoon conditions and rural buying power.
Digital payments followed the same pattern. UPI transaction volume and value increased sharply in October versus the previous month, reflecting the festive drive and the tax changes.
Economists expect the momentum from the second quarter to carry on. GST rationalisation, especially for essential and high‑value goods, should keep consumption strong and help create more jobs.
Amid global trade uncertainty and higher U.S. tariffs on Indian exports, India’s domestic strength shines, the report noted. High‑frequency data shows healthy trends, with GST reforms and holiday sales keeping the economy on track.
That optimism is reflected in forecasts. The International Monetary Fund now projects India’s GDP growth at 6.6 % for FY26, while the Reserve Bank of India sees 6.8 %. Analysts say GST cuts will help keep inflation low and support household spending, sustaining the current economic lift.
Source: ianslive
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