GST Reforms Drive Economic Surge in Puducherry: Vehicle Sales Up 35%, FMCG Up 15%

The article highlights the significant immediate positive impact of the recent Goods and Services Tax (GST) rate rationalization (GST 2.0) on the economy of Puducherry, specifically in the automotive and Fast-Moving Consumer Goods (FMCG) sectors.

Key Economic Surge Indicators

Automobile Sector: Retail sales of vehicles surged by 35% in the initial period following the GST cuts. This massive growth is directly linked to the reduced tax rates on two-wheelers, small cars, and auto parts, immediately boosting affordability.
FMCG Sector: The Fast-Moving Consumer Goods sector also recorded robust growth, with sales increasing by 15%. This rise is attributed to the tax cuts on daily essential items, making them cheaper for consumers.
Multiplier Effect: The reforms are expected to generate a significant multiplier effect on the local economy by stimulating consumer demand, increasing trade volumes, and improving market sentiment across various businesses and retail channels in the Union Territory.

Context of Reforms

The GST rate rationalization, which became effective on September 22, 2025, involved simplifying the tax structure and cutting rates on numerous essential and consumer durable goods. For Puducherry, the immediate retail response demonstrated high consumer price sensitivity, translating the tax cuts directly into higher sales volumes.

Source :- The Indian Express