New Delhi, Jan. 8 -- The prices of various items such as footwear, clothing, consumer durables (such as air-conditioners and TV sets) and automobiles (cars, two-wheelers, etc) have fallen post-GST rationalization.

Our calculations suggest that inflation in India's GST-basket (weight of 17%) decelerated to 2.1% year-on-year in October 2025 and further to 1.8% in November from a stable 3% in the previous 14 months. Core inflation excluding gold was at a record low of 2.5% year-on-year in November, down from 3% in August-September.

The impact of GST rationalization, nonetheless, was expected to go far beyond lower inflation. It was supposed to put more money in the hands of consumers, addressing weak income growth, which was expected to co...