A new study by FICCI CASCADE in partnership with the Thought Arbitrage Research Institute (TARI) suggests that the proposed GST 2.0 regime will significantly lower indirect tax burdens for rural households in India. According to the report, rural consumers will see the share of goods that are exempt or taxed at 5% jump from 56.3% to about 73.5% under GST 2.0. 

This means more than three-fourths of a typical rural household's monthly expenditure could fall under these low or no tax rates. Urban households will also benefit, with the exempt/low-tax share climbing from 50.5% to 66.2%. 

The impact on effective GST incidence is also notable: rural households would see a decline from around 6.03% to 4.27% in GST paid as part of their monthly spend, while urban households’ incidence drops from 6.38% to 4.38%. 

Beyond relief to consumers, the GST 2.0 framework aims to empower MSMEs through automated refunds, fewer compliance hurdles, and lower GST on many everyday goods. The savings, estimated at ₹58-₹88 per person per month, are expected to boost discretionary consumption and ease cost pressures.