New Delhi

Recent government data shows that India’s latest GST rate cuts are striking the right chord with consumers and boosting the economy in the process.

Sectors that witnessed reduced GST rates as part of the “GST Bachaat Utsav” have reported a strong surge in demand over September–October 2025. According to government sources, the taxable value of goods and services under GST grew by 15% during this period nearly twice the 8.6% growth recorded a year earlier.

Officials say this proves the purpose behind the reforms: to leave more money in people’s hands and encourage spending, especially on essential and mass-market products.

Cementing growth in core industries

Construction and infrastructure led the turnaround, with cement and related goods skyrocketing by 19%, a sharp rebound from just 2% growth last year. The auto sector also kept its engines revving passenger cars and buses saw growth climb to 20% from 12% earlier, while commercial vehicles jumped to 12% from a meagre 2%. Tractor sales also improved strongly, rising to 17% from 11%.

Healthcare, food and leather segments shine

Daily-life and essential products showed healthier sales too. Pharmaceuticals surged from 5% to 13%, while packaged foods jumped from 11% to 17%. The leather industry nearly doubled its growth to 18%, and medical devices continued their strong momentum, rising from 16% to 19%.

Some sectors displayed a more mixed performance. While textiles slowed to 8% growth impacted by global market uncertainty two-wheelers and bicycles saw a mild drop as consumers increasingly upgraded to four-wheelers.

Even so, other categories collectively registered a dramatic leap, growing at 28% compared to 12% last year.

Demand surge even stronger than numbers show

Since these gains are measured after tax reductions, officials believe the actual volume growth is even higher. They say the figures clearly reflect stronger consumption across the country and show that businesses are actively passing GST savings to customers.

“The numbers confirm that the reforms helped increase savings for citizens, boosted demand, and ensured no supply constraints,” an official said.

Reforms supporting economy without hurting revenue

The government sees these trends as evidence that simplified, lower tax rates can lift consumption much like the economic principle where reducing taxes increases overall collections through greater demand.

Officials added that the momentum also reassures policymakers that revenue stability remains intact, even as key sectors enjoy reduced GST rates.

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With private consumption data often published with a time lag, GST taxable values are currently the most reliable real-time indicator of how India is spending and right now, the numbers tell a confident story of demand rising across the economy.