GST reforms have boosted economy, says FM Sitharaman in Lok Sabha
Countering the Opposition’s criticism, Union Finance Minister Nirmala Sitharaman on Wednesday said reductions in goods and services tax (GST) rates had supported economic activity. She cited a sharp rise in demand for automobiles, along with higher cement output.
The GST rate rationalisation, implemented in September 2025, reduced tax slabs for several items, particularly in the consumer durables segment.
A study by the National Institute of Public Finance and Policy (NIPFP) indicated that the transmission of GST cuts to consumer prices remained uneven. According to the study, while prices of high-value durables, such as air conditioners and vehicles, declined after the rate cut, those of several frequently consumed items, including food, household goods and personal care products, continued to rise in the subsequent months.
Replying to a debate on the Finance Bill 2026 in the Lok Sabha, Sitharaman contested Opposition leaders’ remarks that GST rate cuts had not worked. She told the House that sales of retail passenger vehicles jumped 26.1 per cent, the highest ever for February. Rural passenger vehicle sales rose 34 per cent, while two-wheeler sales increased 25 per cent.
Tractor purchases grew 36.4 per cent and cement production rose about 9.3 per cent, with monthly GST collection also showing steady growth in recent months.
