The government has announced a significant reduction in Goods and Services Tax (GST) on essential items and medicines, a step aimed at boosting consumer demand ahead of the festive season.

From September 22, daily-use products such as soaps, shampoos, hair oils, and packaged snacks will either get cheaper or come in larger pack sizes as companies pass on the tax benefits. Industry watchers say the move is likely to revive demand, especially in rural and semi-urban markets where affordability drives consumption.

Leading FMCG companies like Parle and Dabur have welcomed the decision, calling it a “game changer.” While larger packs are expected to see direct price cuts, smaller packs may instead offer increased quantity at the same price. Current stock on shelves may continue with existing pricing, but discounts are likely once new shipments roll out.

Healthcare will also benefit. GST has been reduced from 12% to nil on 33 lifesaving drugs, and from 5% to nil on three medicines used in cancer and rare disease treatments. On most other medicines, GST has been cut from 12% to 5%, making essential therapies more affordable.

Experts note that the timing—just before Navratri and Diwali—will help lift consumer sentiment, stimulate spending, and provide fresh momentum to economic growth.

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