New Delhi: Uttar Pradesh, India’s largest consumer market, is set to be one of the biggest winners from the Centre’s latest GST reforms. The move to streamline GST into two slabs, slash cement tax by 10 percent, and remove GST from insurance premiums is expected to directly benefit consumers while driving long-term industrial growth.
Short-Term Loss, Long-Term Gain
Officials estimate UP may face a revenue shortfall of about Rs 3,500 crore initially. However, the long-term gain is projected at nearly ₹30,000 crore, making the reforms a net positive for the state.
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Healthcare Boost
The biggest relief is in healthcare. With GST on life and health insurance premiums cut from 18 percent to zero, nearly 90 lakh more people are expected to come under insurance coverage. Insurance firms project issuing an additional 50 lakh policies in UP by March 2026, greatly expanding access to cashless hospital care. The pharma and healthcare sectors are also expected to grow by 20 percent, while allied industries may see 10–15 percent growth.
Construction and Housing Relief
The 10 percent cut in GST on cement will reduce cement prices by about 8 percent, lowering home construction costs for middle-class families and easing infrastructure spending. Developers argue that cement is a necessity tied to growth, not a luxury, making this reform a major step forward for the real estate sector.
Cheaper Vehicles for Consumers
Vehicle buyers will also feel the relief. Auto dealers estimate that two-wheelers may become cheaper by Rs 10,000–Rs 20,000, while car prices could drop by as much as Rs 50,000. The festive season could see an additional 40,000 vehicles sold in the state.
Growth Push for MSMEs
The reforms are expected to boost MSMEs and SMEs across UP, helping them expand capacity and tap into rising demand. With UP’s status as one of India’s largest consumer markets, this demand-driven growth could accelerate the state’s journey towards becoming a trillion-dollar economy.
GST Collections Still Strong
Despite reforms, UP’s GST collections remain healthy. The state collected Rs 9,760 crore in July 2025 (7 percent growth) and Rs 9,086 crore in August 2025 (10% growth). For FY 2024-25, UP collected Rs 1.12 lakh crore, ranking sixth nationally and contributing 7–9 percent to India’s total GST revenues.
Concerns from the Garment Industry
Not all sectors are happy. The garment industry has raised objections to the hike in GST on readymade clothes priced above Rs 2,500, which rose from 12 percent to 18 percent. Traders say the hike is unfair, will hurt small retailers, and argue that clothing should not be treated as a luxury item.
The Road Ahead
Overall, the GST overhaul is expected to put more money in the hands of consumers, reduce costs for housing, healthcare, and automobiles, and spur industrial growth. While some industries remain dissatisfied, Uttar Pradesh looks set to emerge as one of the biggest beneficiaries of India’s new GST regime.
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