New Delhi, Sept. 4 -- The Centre's decision to rationalise GST rates to two slabs - 5% and 18%, applicable from September 22, 2025, is expected to boost the country's GDP by 0.2-0.3% in the financial year 2025-26, according to Bank of Baroda economist Sonal Badhan.

The BoB economist, in response to a questionnaire from ANI, said that the growth will be more pronounced in the second half of the year, with an even higher increase expected in 2026-27 as the impact of GST cuts becomes more visible.

Asked whether the revenue forgone by the government will be offset by higher consumption, or does this risk widen the fiscal deficit, the economist at Bank of Baroda noted that she expects revenue forgone will be offset by higher consumption, wit...