Feeling the pinch of rising prices? You're not alone. But here's some potentially good news: GST reforms could bring some relief. According to a recent report by SBI Research, retail inflation might decrease by as much as 35 basis points in the fiscal year 2025-26! That's right, those changes to the Goods and Services Tax (GST) could help put a little more money back in your pocket.
The report, highlighted by news agency ANI, suggests that the impact of GST adjustments is already starting to show. They estimate that the Consumer Price Index (CPI), which measures retail inflation, saw a drop of approximately 25 basis points between September and November 2025. This is due to the various changes in GST rates.
Initially, SBI Research had predicted a more significant impact, up to 85 basis points. "However, item-by-item calculation now shows that the decline in CPI inflation due to GST has been around 25 basis points so far in the Sep-Nov'25 period,” the report stated. But here's where it gets interesting: the report also points out that the current estimates might not fully capture the discounts offered during e-commerce sales, which often follow tax reductions. This means the actual impact could be even greater. "We believe that total reduction in CPI owing to GST could be 35 bps (basis points) in 2025-26,” the report clarified.
Let's zoom in on a specific example. In November 2025, Kerala experienced a retail inflation rate of 8.27%. Interestingly, rural inflation was at 9.34%, while urban inflation was at 6.33%. The report attributes this higher inflation in Kerala to rising prices of gold, silver, and oils and fats, which have a larger consumption weight in the state.
But here's a potential snag: The report also warns that the weakening of the rupee could add to inflationary pressures in the future. Looking ahead, SBI Research forecasts that inflation will average 1.8% in 2025-26 and 3.4% in 2026-27. Despite these projections, the report doesn't anticipate any changes in the Reserve Bank of India's current interest rate policy in the February review.
At the national level, CPI inflation increased to 0.71% in November 2025, up from 0.25% the previous month. SBI Research projects inflation to reach 2.7% by March 2025.
What do you think? Do you believe GST reforms are making a noticeable difference in your spending? Are you concerned about the potential impact of the rupee's depreciation? Share your thoughts in the comments below!
