GST 2.0 Made My Mother’s Shopping List Cheaper. Not Her Rent.

I went through our family’s bills before and after September 22. The savings were real. They were also smaller than the headlines suggested.

What the government changed

From September 22, GST moved from four main rates to two, 5% and 18%, with a 40% rate for luxury and “sin” goods. Many everyday items dropped from 12% or 18% to 5%, and individual health and life insurance became fully exempt. The government described it as a festival gift, and the timing, right at the start of Navratri, was clearly deliberate.

I keep my family’s monthly budget in a spreadsheet, so I decided to measure it properly. I took our August bills and recalculated them at the new rates, assuming shops passed the full cut on to customers, which many did not do immediately.

What our bills showed

The items that got cheaper were real. Shampoo, toothpaste, packaged ghee, biscuits and the scooter service all fell by roughly 6% to 11%. My father’s health insurance renewal, due in October, will now cost about ₹3,600 less because the 18% tax on it is gone. That single line was the biggest saving we found.

But when I added everything up, our monthly spending fell by only about 2%. The reason is simple once you see it. Our largest costs are rent, school fees, electricity, fresh vegetables and milk. Rent on a home, education, fresh food and milk were either outside GST or already taxed at zero. Electricity is not under GST at all. A tax cut only helps with the things that were taxed in the first place.

Why it still matters

A 2% saving sounds small, but it is not nothing. Across crores of households it adds up to a meaningful amount of extra spending money, which is exactly what the government is betting on. If people spend more, shops sell more, factories produce more and some of the lost tax comes back through higher volumes. Economists will be watching the October and November collections to see if that bet works.

For my family, the lesson was about where our money actually goes. We tend to notice the price of shampoo because we buy it often. We notice rent less because it leaves the account automatically. A good budget, like a good tax reform, should be judged by its effect on the big lines, not the visible ones.