GST Reforms to Boost Additional Consumption Worth ₹20 Lakh Crore: Vaishnav

Union Minister Ashwini Vaishnav has said that the latest GST reforms will generate an additional ₹20 lakh crore in consumption, marking the most significant economic reform since liberalization in 1991.

 

Wider Economic Impact

Vaishnav explained that the GST rate cuts will provide immediate relief to middle-class households and low-income families, enhancing their purchasing power. “From September onward, 140 crore Indians will see the benefits directly in their everyday spending,” he said.

The minister noted that with lower taxes on food, healthcare, transport, and housing-related goods, demand will increase across all sectors. This will lead to a multiplier effect on investment, trade, and employment.

 

Fiscal Calculations

According to ministry estimates, the reforms are expected to inject over ₹330 lakh crore into the economy over the long term, with consumption growth of around ₹20 lakh crore in the near term. Tax revenue buoyancy is expected to offset any short-term losses to the exchequer.

 

Farmers to Benefit Most

Meanwhile, Union Agriculture Minister Shivraj Singh Chouhan said that small and marginal farmers will gain the most from the reforms. Lower GST on seeds, fertilizers, irrigation equipment, and food processing machinery will reduce input costs and boost farm productivity.

He added that cheaper agricultural equipment and allied services will make farming more viable, while food prices for consumers will remain stable. “The government has ensured that rural households are the first to benefit,” he said.

 

Outlook

Economists believe the GST reforms will raise household spending, stimulate private investment, and support employment growth, ultimately creating a stronger and more resilient Indian economy.