Major Price Drop on Fruits, Vegetables, Milk, and Essentials Ahead of Diwali Thanks to GST Cuts

Image Source: The Economic Times

Ahead of Diwali, household essentials like fruits, vegetables, milk products, and other staples have witnessed significant price reductions following GST rate cuts under the new GST 2.0 reform. The Modi government’s fiscal move enhances consumer savings, boosts festive spending, and supports middle-class and low-income families across India.

GST Cuts Deliver Diwali Relief on Essentials

In a timely festive-season boost, the Indian government has implemented sweeping GST reforms effective September 22, 2025, which have translated into major price reductions on key daily essentials including fruits, vegetables, milk and dairy products, and packaged foods. These reforms, part of the next-generation GST 2.0 rollout headed by Prime Minister Narendra Modi and Finance Minister Nirmala Sitharaman, simplify GST slabs and reduce burdens on consumers.

The revised GST structure consolidates earlier multiple slabs into two main rates—5% and 18%—with many essential items shifted to the much lower 5% or zero percent taxation category. Particularly, milk products such as UHT milk, paneer, butter, ghee, and cheese have seen their GST rates drop sharply, leading to direct price cuts on store shelves. Similarly, staple food items, packaged dry fruits, confectionery, and snack foods have benefited from reduced tax rates, culminating in broad relief for households preparing for the festive season.

Prime Minister Modi termed the reforms a “GST savings festival” and emphasized how the poor, middle class, women, youth, and traders would all benefit from increased affordability and consumption power. The government estimates that these reforms will put approximately ₹2 lakh crore back into consumers’ hands, supporting both household budgets and overall economic growth.

Important Points

GST 2.0 Implementation: Effective from September 22, 2025, simplifying slabs to 5% and 18%
Price Cuts: Significant reductions on milk products, fruits, vegetables, dry fruits, confectionery, and packaged foods
Milk & Dairy: GST on UHT milk, paneer, butter, cheese, ghee cut to 5% or zero, hitting store prices
Staples & Snacks: Namkeens, biscuits, cornflakes, chocolates, and other packaged foods now under 5% GST
Household Impact: Estimated monthly savings of ₹400-600 per middle-class family on groceries
Government Support: The fiscal cost of ₹48,000 crore offset by boosting consumption and ease of living
Economic Boost: Reform aimed at increasing consumption demand and supporting rural and semi-urban markets

Notable Updates

Brands like Amul and Mother Dairy have already passed on price savings to consumers on products such as paneer, milk, butter, and cheese.
Personal care items like shampoo, toothpaste, soap, and hair oil are also benefiting from reduced GST to 5%, easing household expenses further.
GST cuts are complemented by government strategies to monitor prices and ensure the tax benefit reaches consumers before Diwali shopping peaks.

The reform supports government targets for Atmanirbhar Bharat by making essential commodities more affordable and enhancing the ease of doing business.

This proactive GST reset is positioned as a key festive gift from the Modi government, making essentials more accessible and helping India’s families celebrate Diwali with greater financial ease.

Sources: NDTV, Times of India, Indian Express, Economic Times

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