SDG 8: Decent Work & Economic Growth | SDG 9: Industry, Innovation & Infrastructure
Institutions: Ministry of Finance | GST Council | Government of the National Capital Territory of Delhi
The latest GST rationalisation will ease household budgets and strengthen Delhi’s MSME-driven economy. Everyday essentials and services are now 6–12% cheaper, providing direct relief to families while boosting competitiveness across key markets.
Key impacts in Delhi:
Household savings: Dairy products (milk, paneer, ghee) now tax-free or reduced to 5%; stationery items like exercise books and pencils at 0% GST. Insurance premiums are GST-free, saving households 18% on costs.
Automobiles & parts: GST on auto components cut from 28% to 18%, reducing vehicle servicing bills by ~7.8% and boosting Karol Bagh/Kashmere Gate’s auto hubs (~₹1,000 crore monthly trade).
Tourism & hospitality: Hotel stays under ₹7,500/night now taxed at 5% (6.25% cheaper); GST on kitchen inputs cut from 18% to 5%, reducing restaurant and catering costs.
MSME sectors: Footwear, finished leather, bamboo and cane furniture, and beauty & wellness services all moved to 5% GST, improving affordability for consumers and stabilising earnings for small entrepreneurs and artisans.
Printing & packaging: Cartons, boxes, and print services now at 5% GST, lowering costs for traders and online sellers.
Delhi exemplifies how GST rationalisation can serve as both consumer relief and MSME stimulus. By cutting costs in labour-intensive sectors, the reforms aim to spur demand, create jobs, and help local markets compete with large organised players.
What is GST Rationalisation? → The process of reducing and aligning GST rates to simplify compliance, lower prices, and strengthen economic growth.
Relevant Question for Policy Stakeholders: How can the impact of GST rationalisation be tracked to ensure household savings translate into sustained consumption growth and MSMEs capture long-term competitiveness?
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