GST Rate Cuts to Boost GDP by 60 bps and Lower Inflation by 100 bps

GST Cuts May Lift GDP by 60 bps and Reduce Inflation by 100 bps

Economists believe the recent Goods and Services Tax (GST) cuts will give India’s economy a strong boost. Starting September 22, the lower tax rates are expected to raise GDP growth by about 60 basis points (bps) and reduce retail inflation by nearly 100 bps over the next year.

The immediate effect will be lower prices for many goods and services. This means people will spend less on the same items, which could encourage them to buy more. Higher spending will support faster economic growth.

After a long GST Council meeting, Finance Minister Nirmala Sitharaman said the full effect of the tax cuts can only be measured after a few months. However, she added that the impact on GDP will be “very positive.”

Experts agree, saying that cheaper goods will reduce pressure on households, help control inflation, and increase demand. Together, this should strengthen India’s growth at a time when the global economy is facing challenges.

The GST cuts will take effect from September 22, and the coming months will show how much they boost India’s economy.