Impact of GST on Household Expenditure in Madhya Pradesh

Abstract

This study examines the multifaceted impact of the Goods and Services Tax (GST) on household expenditure in Madhya Pradesh through a primary, survey-based approach. Utilizing a structured questionnaire administered to a diverse sample of households across various income levels and geographical regions, this paper analyzes changes in consumer spending patterns before and after the implementation of GST. The findings reveal a significant, positive effect on household budgets due to the recent rationalization of GST rates, particularly on essential goods, personal care products, and consumer durables. While the reforms have made a wide range of products more affordable, the analysis also highlights the subtly regressive nature of the GST, where the tax burden on lower-income groups remains disproportionately high relative to their consumption. The study concludes that while GST has successfully streamlined the tax structure and stimulated domestic consumption, there is a continued need for targeted policy interventions to further enhance the system's progressivity and ensure a more equitable distribution of the tax burden across all segments of the population.

The introduction of the Goods and Services Tax (GST) in India has significantly impacted household expenditure, primarily by altering the prices of a wide range of goods and services. A survey-based paper on this topic would investigate how the GST regime, particularly recent rationalization efforts, has affected consumer spending, focusing on different income groups and product categories.