PM Modi says ‘GST savings festival’ begins: with lower prices, how household budgets are set for boost

Here’s a breakdown of what PM Modi’s “GST Savings Festival” means, what’s changing, and important caveats:

What is the “GST Savings Festival”

PM Modi has dubbed the rollout of the new GST regime as a “GST Bachat Utsav” or “GST Savings Festival,” coinciding with the beginning of Navratri.
The idea is that with lower GST rates on many goods and services, consumers will spend less and thereby see relief in their household budgets.
The government is also pushing for businesses to pass on the full benefit of the rate cuts to end consumers.

The previous four-slab GST structure (5%, 12%, 18%, 28%) is being overhauled; under the new system, most goods and services will fall into 5% or 18% tax slabs.
There will also be a 40% “demerit / sin goods” slab for luxury, vice, or high-end goods.
Many items that were taxed at 12% will now shift to 5%.
Several essentials—such as paneer, butter, milk, ghee, snacks, ketchup, jam, ice cream, etc.—will become cheaper.
- Example: A 200 gm packet of paneer might drop ~3 %, Mother Dairy milk cartons are set to cost less too.
Even certain durable goods—electronics, automobiles, small cars—are expected to see tax cuts, which may lead to lower retail prices.
The government claims that combining income tax cuts (already in place) with these GST changes will result in savings of about ₹2.5 lakh crore for the public.

For many households, especially those buying essentials, the cost of everyday goods should drop. This will free up some spending headroom.
The impact will be more noticeable for items that have their GST rate reduced sharply (for example, from 12 % → 5 %).
However, not every product will see a benefit; some goods already taxed at 5 % or 18 % may not change, and luxury/sin goods may even become more expensive due to the 40 % slab.
The government is also instituting controls or monitoring to ensure that retailers do pass the benefit to consumers—and consumers can complain if they don’t.

Some smaller traders and dealers have flagged transition issues—for example, with unused input tax credits.
States may see revenue loss from lower tax rates, which can lead to debates over compensation or fiscal adjustments.
Critics argue that the “festival” framing may overstate the practical benefits and that not all consumers or regions will feel equal relief.
The effectiveness will depend on how uniformly businesses apply the reduced GST and how well enforcement ensures compliance.