India’s economy is currently in a relatively strong position, and its biggest pillar remains domestic consumption. Household spending contributes nearly 60 percent of India’s GDP, making the common consumer the real engine of growth. As Budget 2026 approaches, the government’s focus is clearly on protecting purchasing power and easing financial pressure on ordinary citizens so that consumption momentum remains intact amid global uncertainty.

When consumers feel confident about their income and expenses, economic growth sustains itself. This is why Budget 2026 is expected to place the common man at the centre of policy decisions—through tax relief, lower costs, and reforms that directly affect daily life.

GST 2.0 and relief for households

One of the most important developments in recent times has been the transition towards GST 2.0. Simplification of tax slabs, a possible move towards two primary GST rates, and lower taxes on essential goods, electronics, and small cars have already reduced the cost of living.

As goods become cheaper, households are left with more disposable income. This additional spending power boosts retail demand, which in turn is reflected in stronger GST collections. In many ways, this cycle shows how tax simplification directly benefits both consumers and government revenues.

Why dialogue with industry matters

Regular interaction between the government and industry has also improved the GST ecosystem. Frequent clarifications, digital upgrades, and simpler compliance processes have reduced uncertainty for businesses. When companies face fewer procedural hurdles, operating costs fall—and those savings are eventually passed on to consumers through lower prices.

As India aims to strengthen its position as a global manufacturing hub, a stable, modern, and predictable tax system becomes essential.

Petrol, diesel, electricity under GST: a long-pending reform

Even today, petrol, diesel, gas, and turbine fuel remain outside the GST framework. This keeps transportation and logistics costs high and fuels inflation across sectors. Bringing these fuels under GST—while protecting state revenues—could significantly reduce freight costs and lower prices of everyday goods.

Similarly, including electricity and real estate under GST would remove hidden taxes, making electricity bills and housing construction more affordable for the common citizen.

Input tax credit needs correction

The core idea of GST is that the final tax burden should fall on the consumer—not on businesses. However, restrictions on input tax credit (ITC) currently prevent companies from fully offsetting taxes paid on inputs. This raises production costs and pushes prices up.