GST Bachat Utsav: Extra Rs 20 lakh crore consumption boost partly due to recent tax cuts, says Vaishnaw

Ashwini Vaishnaw

An extra Rs 20 lakh crore of consumption boost to the economy will come partly through the recent Goods and Service Tax (GST) cuts, IT minister Ashwini Vaishnaw said on Saturday, while addressing a press conference on GST Bachat Utsav.

He was joined by finance minister Nirmala Sitharaman and commerce minister Piyush Goyal who emphasised the impact of tax cuts on the common man and the overall economic growth of the country.

"During the GST reform, many estimates were made about how consumption would increase and how demand would grow in the country. If we look at our GDP numbers from last year, it was Rs 335 lakh crore. Of that, our consumption accounted for Rs 202 lakh crore, and investment accounted for Rs 98 lakh crore," Vaishnaw said.

"However, because of the GST reforms, consumption will be significantly increasing, and it's very likely that consumption will increase more than 10 per cent this year, which means there is a strong possibility of extra consumption of around Rs 20 lakh crore," he added.

Addressing the press conference, minister of commerce and industry Piyush Goyal highlighted how the recent GST reforms have bought about a positive trend in terms of consumption. "In the general market, significant trends were observed. For instance, Maruti Suzuki sold over 1,65,000 vehicles in just eight days during Navratri. The electronics sector broke records," he said.

GST cuts were in the work for one-and-a half year 

Meanwhile finance minister Nirmala Sitharaman, in response to a question whether GST cuts were a response to the tariff war, revealed that they were in works for the past one-and-a-half year.

"This has been in the works for one-and-a-half years. Who had thought of any tariff war at that time? Several groups of ministers were working on this for one and a half years... So these are discussed at various levels at various times. It's no way close to the tariff war. This (GST cuts) had to happen. This was waiting to happen for quite some time," she said.

The briefing came amid strong festive-season demand in key consumer segments such as automobiles, electronics, and FMCG, buoyed by the introduction of GST 2.0 -- the government’s overhauled tax framework implemented on September 22, 2025.