PM Modi says new GST rates will lower prices, give household budgets a boost

The Indian government will roll out new Goods and Services Tax (GST) rates from Sep 22 midnight, which are expected to bring down prices of over 375 commonly used goods, Prime Minister Narendra Modi announced. The reform has been dubbed a “GST savings festival”, intended to ease costs for consumers from all economic strata.

In his address to the nation on the evening before the rollout, PM Modi said that many sections of Indians, including the middle class and youth would benefit from what he called “next generation” GST reforms.

Items in the fast-moving consumer goods (FMCG) sector will see some of the most visible price changes. Examples include food products like milk, butter, paneer, cheese, ghee, pickles and jams. For instance:

A 200-gram packet of paneer will cost about 3% less; Amul has cut its price to ₹92.

UHT milk cartons, such as those from Mother Dairy, will drop from ₹77 to ₹75 per litre. Amul Milk Gold one-litre cartons will go from ₹83 to ₹80.

Butter khakra, cheese slices, ketchup, shampoo, and similar personal and kitchen staples will also see reductions, mostly in the 4-8% range.

Beyond household goods, other consumer sectors and durables are also affected. Cement, for example, will be taxed at 18% instead of 28%, leading major manufacturers like UltraTech and JK Cement to promise price cuts.

Annual premiums for health and life insurance policies (for individuals) will be exempted from 18% GST, potentially reducing premiums by about 15%.

Automotive prices are among the more dramatic shifts. GST has been reduced for small cars, and compensation cess removed in many cases.

Maruti Suzuki has already announced price cuts ranging from ₹46,400 up to ₹1.29 lakh depending on the variant. Smaller hatchbacks and mini SUVs will see the sharpest reductions.

The government has asked companies to fully pass these benefits to consumers, and the Finance Ministry plans to monitor monthly price changes via field GST officers.

Some transitional issues remain, particularly for smaller businesses concerned about accumulated unused input tax credit. Auto dealers, especially, point out that cars stocked under old tax rates may still carry higher costs until systems realign.

Economists believe that the revisions may lead to improved consumer demand, possible reductions in inflation in the near term, and greater disposable income for many households.

For example, cost decreases in essentials are expected to relieve pressure on daily budgets for the poor and middle class alike.

As these new rates take effect, households across India are watching prices in neighborhoods and marketplaces, checking for the promised relief in everyday goods — from milk and cooking staples to automobiles and insurance.