Although household work is not included in the estimation of national income, it is often remarked that the pulse of India’s economy begins with its households. India’s economy thrives in every kitchen, every market, and in the prudent savings of homemakers. The household economy is set to gain fresh momentum and optimism with the nationwide rollout of GST 2.0 from September 2022.
By streamlining tax slabs to just 5% and 18% and providing relief on daily essentials, it represents a tangible change in daily life, influencing how millions of Indian women plan, budget and manage their households.
It is expected that the next-generation GST reforms will reduce household expenses by about 13% on groceries and daily essentials.
A small car buyer could also save around ₹70,000. According to government estimates, purchases of stationery, clothing, footwear, and medicines will bring savings of 7–12%, while individual health and life insurance policies—now exempt from GST—will offer savings of up to 18%.
With lower tax rates on essentials such as food items, household products, lifesaving drugs, personal care goods, education-related goods, GST 2.0 aims to ease the financial burden on families while stimulating consumption and improving the overall cost structure for households.
The families are projected to save up to 15% on monthly expenses, and these savings enable households to invest more in their future for either their children’s education, improving healthcare access or creating savings reserves.
Besides, the housemakers can now choose to spend these savings on themselves, something many had long postponed while prioritising their children’s needs when the cost of living was high.
The amount of savings may be small, but for the homemaker, it holds immense value. This reflects that the government has acknowledged her silent struggle and ensured that her kitchen is no longer a burden.
For the homemaker, GST 2.0 is not just about harmonising tax codes or boosting revenue. But, it represents the dignity in every household, confidence in every woman and hope in every family that tomorrow will be a little brighter.
Women are often fond of beauty and personal care products; however, in the past, due to the high cost of such items, they had to sacrifice their desire for them.
The reduction in tax rates on personal care products now empowers women to prioritise self-care and well-being without guilt or hesitation.
This isn’t just a tax update, it’s a self-care revolution for women. Imagine being able to indulge in your monthly manicure or that much-needed hair spa without feeling guilty about the cost.
For women across India, this marks a welcome step towards making self-grooming accessible, affordable, and genuinely empowering.
However, it is equally important to cultivate an investment-oriented mindset alongside the consumption benefits of GST 2.0.
Why should the small amount of savings be confined only to beautification or household expenses by women? If these savings are channelised into investment, they can contribute meaningfully to the economy through homemakers.
This is an opportunity for women at home to participate in economic growth and challenge the long-held notion of the “economic man.” The small yet meaningful savings arising from the reduction in tax rates need not be confined to personal spending alone.
With the proper institutional and financial support, these savings can become a stepping stone for women to explore micro-investments or small-scale entrepreneurial ventures.
For example, rural women engage in minor tailoring, handicrafts, or agri-related businesses benefit from cheaper inputs, making their ventures more profitable and sustainable.
The exemption of health and life insurance from GST is a major gender-sensitive reform, ensuring women have greater access to social and financial security — a crucial element of empowerment.
Women often forego health coverage due to cost — this policy change incentivises financial protection for them and their families, thereby reinforcing long-term well-being and economic stability.
If women are healthy, their children are more likely to be healthy as well, which will form the foundation of more productive future human capital.
Cheaper two-wheelers and small cars due to new GST reform may enable more women to own vehicles, thereby enhancing their mobility, safety, and access to employment. It’s like a dream come true for many women to own and drive a car purchased through their own household savings.
This not only symbolises financial independence but also gives them the confidence and convenience to manage daily responsibilities, such as taking their children to school, without depending on others.
Over 60% of microfinance borrowers in India are women from semi-urban and rural areas and their credit demand has tripled since 2019. With GST 2.0 easing tax burdens on essentials, these women now save from their monthly expenses.
That money can go straight back into their businesses and households. By lowering input costs and improving liquidity, GST 2.0 enhances profit margins, strengthens small enterprises, and creates new opportunities for women’s economic participation. Additionally, women form the backbone of India’s handloom industry.
According to the Handloom Census, nearly 70% of handloom weavers and allied workers are women.
They are involved at every stage, from spinning and dyeing to weaving, designing, and finishing. Despite their contributions, women weavers often face challenges such as low wages, limited access to markets, inadequate credit, and a lack of modern equipment. Policies like GST 2.0, which reduce input costs and promote MSMEs, can help improve their economic prospects.
Conversely, a reduction in the tax slab enhances purchasing power among consumers, thereby stimulating higher sales and market demand.
Thus, GST 2.0 holds the potential to stimulate entrepreneurial behaviour and promote financial independence among women indirectly.
To translate this into reality, policy efforts must focus on strengthening financial literacy, ensuring easy access to credit, and creating an enabling environment that encourages women to channel their savings into productive investments.
This reform presents an opportunity to empower women, particularly in rural and semi urban areas, by promoting awareness about savings, investment, and financial planning.
When viewed through a women-centric lens, the policy supports economic inclusion, financial literacy, and self-reliance, aligning with the government’s broader goals of “Nari Shakti” and “Viksit Bharat 2047.”
In essence, GST 2.0 is not just a tax reform, it’s a quiet revolution empowering women to move from survival to sustainability, from managing households to managing enterprises.
Views expressed are that of the author and do not reflect EastMojo’s view on this or any other issue. The author is Assistant Professor, Department of Economics, Assam Women’s University.
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