GST Rate Cuts: Empowering Punjab’s Growth & Livelihoods
The recent GST reforms, which include rate cuts from 12% to 5% across numerous sectors, are designed to boost Punjab’s economy by lowering prices, increasing competitiveness, and supporting key livelihoods across the state.
Key Sectoral Gains from Tax Rationalization
- Textiles and Handicrafts (12% to 5%):
- Phulkari Embroidery and Woollen Shawls & Stoles—industries that provide livelihoods to thousands of artisans (many of whom are women) in clusters like Amritsar and Patiala—will become more affordable and competitive in both domestic and export markets.
- Other textiles, such as hand-block printed fabrics and women’s cotton kurtas, also benefit, supporting better incomes for weavers and tailors and encouraging formalization.
- Bicycle Manufacturing (12% to 5%):
- The GST reduction on bicycles provides a substantial price cut, directly benefiting consumers and boosting sales volume in Ludhiana, a major bicycle manufacturing hub that employs over 40,000 people.
- Traditional Crafts and Metalware (12% to 5%):
- Handicrafts like the Punjabi Jutti (footwear) and wooden products, along with the traditional brass and copper utensils industry, will see lower costs, stimulating demand and strengthening the viability of small artisan-led units.
- The large steel kitchen utensils cluster in Jalandhar and Ludhiana also gains, improving affordability for consumers and enhancing export potential.
- Food and Agro-Products (12% to 5%):
- Processed foods and agro-products, including namkeen & savoury snacks, pickles & preserves, and honey, will experience a 6–7% drop in retail prices. This supports local and small-scale producers (including many women-led Self Help Groups) by improving margins and increasing consumption.
Economic Outcome
These targeted GST rate reductions are expected to stimulate consumer demand, enhance the competitiveness of Punjab’s products globally, and ultimately secure and strengthen the livelihoods of millions of workers, artisans, and MSMEs across the state.