The impact of the GST rate cut will sustain even after the festive season is over, Union finance minister Nirmala Sitharaman argued on Saturday, claiming that India’s consumption story will continue.
Addressing a joint press conference in Delhi along with commerce minister Piyush Goyal and IT minister Ashwini Vaishnaw, Sitharaman said the benefit of the GST rate cut is reaching consumers, translating into ‘record’ sales.
Asked if the spike in sales for automobile and consumer durables — where the rate cut benefit has been most visible in terms of price reduction — would continue after the festive period, she said, “Yes, it will.”
“It (rate cut) would benefit consumers on day-to-day items…the consumption story will continue,” she said, scotching speculation that reported sales spikes were due to pent up demand.
However, the FM declined to hazard a guess if the spike in sales will translate into higher GDP growth for this fiscal.
Commerce minister Piyush Goyal buttressed the claim that upswing is not a flash in the pan by pointing towards the September GST collection which was up by 9 per cent year-on-year. Even as the Prime Minister Narendra Modi announced on August 15 that GST cut will bring down prices of daily items, the sales were not dampened by deflationary expectations, he said noting that September GST data reflected business activities in August.
IT minister Vaishnaw predicted that consumption would increase more than 10 per cent this year. Last year, the GDP size was ₹335 lakh crore, of which ₹202 lakh crore was from consumption and ₹98 lakh crore from investment. There is a possibility of about ₹20 lakh crore extra consumption this fiscal compared to last fiscal, Vaishnaw said.
The FM said the government is closely monitoring the prices of 54 products to ensure the benefits of the revised tax structure reach the common man. “More than expected tax reduction has happened and consumers have ended up getting benefits that were expected and some more than that,” she said.
Sitharaman also said the department of consumer affairs has received 3,169 complaints related to GST price anomalies. Of this, 3,075 complaints have been forwarded to the concerned authorities.