GST rate cut offset by ‘galloping’ inflation: Congress

Congress general secretary in charge of communications, Jairam Ramesh. | Photo credit: Shiv Kumar Pushpakar

The Congress on Monday (Sep 21, 2026) said the impact of the GST rate cut on a range of commodities would be eroded by “galloping inflation”, with prices of several consumer products returning to pre-cut levels within the year.

Sharing a media briefing on the issue, Congress General Secretary (Communications) Jairam Ramesh said the GST rationalization announced in September 2025 was “long overdue” but its impact on consumption was uneven.

“The GST rate cut in September 2025 was heralded as a game-changer. It was long overdue, of course – but touting them as magic wands was an exaggeration. In fact, their impact on consumption growth was mixed at best. For example, car sales benefited while apparel sales did not,” Mr Ramesh said in a post on X.

“Now comes evidence that the effect of the GST rate cut on various commodities is being neutralized by ‘galloping inflation’,” he said.

Prices of several consumer products have returned almost to pre-GST cut levels within a year without any significant increase in consumption, Mr. Ramesh claimed.

He also linked the issue to the broader state of the economy, challenging the Indian growth narrative based on headline GDP data.

“The headline quarterly GDP numbers may give the ruling establishment a momentary thrill when overlooking their imperfections, but there are many fault lines in India’s growth story that the Prime Minister and his cheerleading brigade simply do not acknowledge,” he said.

“Neither consumption is on the rise across income segments, nor is private investment rising,” Mr. Ramesh said, adding that real wages are falling.

Published – 21 Sep 2026 21:50 IST