Prime Minister Narendra Modi launched the GST Bachat Utsav (savings festival) last month, a 100-day government campaign to ensure consumers benefit from reduced tax rates. The government has been monitoring price cuts to 54 items since lower rates came into effect, Sitharaman said.
Sitharaman noted that in some cases, businesses had passed on higher than the weighted average of GST rate cut benefits to consumers. She said sectors like automobiles and consumer durableshad seen robust sales.
“Three-wheeler dispatches rose 5.5% on-year, while two-wheeler sales reached 21.6 lakh units. Passenger vehicle dispatches alone stood at 3.72 lakh in September,” the minister said, citing the example of Hero Motors, which posted its highest monthly sales in September. Airconditioner sales doubled on the first day GST reforms kicked in, while TV sales saw a 30-35% rise, she added.
Sitharaman said some items had seen a greater-than-expected reduction in prices, with shampoo prices dropping 12.36% compared to the intended 11.02%. Similarly, prices of household articles made of iron, steel and copper fell 10.24%, exceeding the expected 6.25% reduction. “What we are doing today is not a correction, but a conscious decision — a reflection of cooperation between the central government and the GST Council to pass on greater benefits to the people,” Sitharaman said.
Commerce minister Piyush Goyal said the move would give a fillip to the economy, which had already been taken note of by the IMF, as it had upgraded India’s growth projection. “Indirect tax directly impacts 140 crore Indians, and now a benefit of Rs 2.5 lakh crore has been given via GST cuts. The multiplier effect due to tax cuts has already given a boost to the economy,” Goyal said.
