Mumbai: The recent rationalisation of Goods and Services Tax (GST) rates is set to deliver tangible benefits across Uttarakhand’s diverse economic landscape. By reducing tax burdens on key sectors such as agriculture, tourism and manufacturing, the reforms are expected to improve affordability, support small producers and stimulate investment in the state’s hill and plain regions alike.
In agriculture, the revised GST rates target traditional hill crops that form the backbone of local farming systems. Pahari Toor Dal, cultivated across 13 districts including Chamoli, Almora and Pithoragarh, now attracts a 5% GST rate, down from 12%. This pulse, grown under the Barahnaja mixed cropping system, is valued for its organic quality and cultural significance. The rate cut is likely to enhance its competitiveness in health-conscious markets, offering better returns to small and marginal farmers.
Similarly, Uttarakhand Red Rice, grown in Purola and Mori, benefits from the same reduction. Known for its contribution to agro-biodiversity and local diets, the crop supports around 4,000 livelihoods. Lower taxation could help expand its reach in packaged food segments, reinforcing sustainable hill agriculture. The GI-tagged Lakhori Mirchi from Almora also sees its GST rate halved, a move that strengthens its market presence and benefits approximately 5,000 people involved in its cultivation.
Tourism, which contributes over 13% to the state’s Gross State Domestic Product, stands to gain from reduced GST on hotel tariffs. Accommodation priced up to ₹7,500 will now be taxed at 5% instead of 12%, making travel more affordable for visitors. This change is expected to benefit nearly 80,000 people employed directly and indirectly in tourism, particularly in destinations such as Nainital, Mussoorie, Auli and Rishikesh. The reform is likely to support small hotels and homestays, which form a significant part of the state’s hospitality sector.
Traditional crafts and cottage industries also receive a boost. Aipan art, practised in the Kumaon region and adapted into decorative items, now attracts a 5% GST rate. This benefits around 4,000 artisans, many of whom are women. Hand-knitted woollen garments, a seasonal industry led by hill women, are expected to become 6–7% cheaper, supporting around 10,000 livelihoods. Ringal bamboo craft, prevalent in Pithoragarh and Champawat, is another beneficiary. A study in the Garhwal Himalaya found that nearly half of hill families earn some income from bamboo craft, underscoring its economic relevance.
The manufacturing sector sees notable relief, particularly in food processing and automobiles. Uttarakhand hosts 383 registered food processing units, mainly in Rudrapur, employing around 30,000 people. The GST rate cut from 12% to 5% is expected to improve margins and encourage value addition in fruit, herbal and organic products. In the automobile belt spanning Pantnagar, Rudrapur and Haridwar, GST on vehicles up to 1200cc (petrol) and 1500cc (diesel) has been reduced from 28% to 18%. This could lower prices by 8–10%, supporting demand and sustaining around 50,000 jobs.
The Medical Device Park in SIDCUL’s industrial area also benefits from the rate cut. With GST reduced from 12% to 5% on medical devices, production costs are expected to fall, enhancing competitiveness and attracting investment. Around 4,000 people are employed in this sector, which forms part of the state’s growing MedTech ecosystem.
Taken together, these reforms reflect a targeted approach to economic development. By easing tax burdens on sectors with high employment potential and cultural significance, the GST changes align with Uttarakhand’s vision of inclusive and sustainable growth. The measures support small producers, artisans and entrepreneurs, while also strengthening industrial hubs in the plains. They bridge the gap between traditional livelihoods and modern markets, offering a more resilient foundation for the state’s future.
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