NEW DELHI, 31 October (UNI) The rollout of GST 2.0 and strong digital payment momentum helped in gathering steam for India’s private consumption.
According to Bank of Baroda’s latest analysis, the government estimates the new GST framework could add Rs 20 lakh crore to consumer spending, with its timing just before Dussehra and Diwali providing a further boost amid favourable macro conditions such as low inflation, good monsoon and strong sowing activity.
The analysis, based on Reserve Bank of India’s daily payments data, shows that UPI transactions surged to Rs 17.8 lakh crore during the Dussehra-to-Diwali period, up from Rs 15.1 lakh crore a year earlier, an 18% jump.
Debit card payments also saw a sharp rise to Rs 65,395 crore from Rs 27,566 crore in the same period last year, while credit card payments moderated slightly to Rs 39,045 crore.
When combined, transactions through UPI, debit, and credit cards reached Rs 18.8 lakh crore, reflecting robust festival-led consumption and signalling a likely rebound in household demand this quarter.
The report said the UPI merchant data for September 2025 revealed sharp spending growth across several consumer-oriented categories. These included men’s and women’s clothing at 68.5% YoY, online marketplaces: 64%, liquor shops: 98.8%, beauty and barber shops: 30.6%, electronics outlets: 20.8%.
Average spending per transaction stood at Rs 1,052 for UPI, Rs 8,084 for debit cards, and Rs 1,932 for credit cards, indicating greater traction in small to mid-ticket transactions, the BoB analysis said.
The report highlighted signs of frontloading of spending, where households make purchases earlier than usual, especially across apparel, electronics, and online retail platforms. The GST rate cut, which took effect in October, is expected to further amplify spending patterns in the coming weeks.
“October 2025 data will provide clearer evidence of the GST benefit, but early signals point to a strong consumption revival,” said Dipanwita Mazumdar, an economist at Bank of Baroda.
Bank of Baroda expects private consumption demand to remain buoyant through Q2 and Q3 FY26, driven by the GST stimulus, improved consumer sentiment, and strong digital adoption.
