Festive spending is expected to slow down this year due to low wage growth and subdued consumption in urban regions. According to an Ambit report, the GST cuts may also not increase overall demand during the season due to increased brand substitution and other related factors.

GST cut effect remains limited

According to the Ambit report, the GST rate cut would be more visible for higher-ticket items, such as automobiles , electronics, and jewellery, and would also lead to higher purchases in these categories. On the other hand, low-ticket items, primarily FMCG products, may not see an incremental increase in consumption during the festive season due to GST cuts. Ambit says that so far, FMCG companies and retailers have mentioned sluggish sales.

The Ambit report suggests that desp

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