As a teacher, I see the recent GST relaxation on educational materials as a Diwali gift for millions of students and their families across India. The impact is significant, not only through immediate savings but also in shaping a future generation of learners who can become the core human capital of our country.
Education costs form a large part of household spending. According to the Ministry of Statistics and Programme Implementation (MoSPI, 2025), urban households spend about 4.3 per cent of their total monthly consumption on education, while rural households spend around 1.9 per cent.
With over 25 crore students enrolled in schools and higher education in India, even a small GST reduction on items like textbooks, stationery, and teaching aids can affect transactions worth thousands of crores annually. Inflation trends emphasise the need for this reform.
The Consumer Price Index (CPI) for Education has been steadily increasing at about 4 per cent annually, compared to the overall retail inflation of 2.1 per cent as of June 2025 (per MoSPI data). This indicates that the cost of education is rising faster than other essentials. Lowering GST could directly ease this burden.
For example, reducing GST on common items like notebooks and school supplies from 12 per cent to 5 per cent could save a family with two children around `400–`500 each year. Though modest on an individual level, nationwide this translates into crores of rupees in savings and can reduce education inflation by up to 1.5–2 percentage points.
Such savings are vital in a country where 95 per cent of education expenses are paid directly by families (as per the Ministry of Education’s Household Expenditure on Education Survey). For middle and low-income families, even small savings can improve access to digital resources, nutritious meals, and after-school support. This fiscal boost not only enhances affordability but also promotes inclusivity in education.
From a broader view, this GST reform enhances India’s international standing. Countries like China and Bangladesh already offer subsidised or nearly free textbooks and basic school
supplies.
By lowering indirect taxes, India moves towards ensuring its youth stay competitive in the global knowledge economy. As highlighted in the National Education Policy (2020), affordable and equitable education access is key to developing world-class human capital. Reduced GST rates align with this aim. However, this is just a first step.
To truly make India a hub of skilled, innovative talent, more fiscal reforms are needed. GST on digital learning devices like tablets and laptops should be lowered to expand online education. Tax incentives for vocational training and skill development could motivate youth to join emerging sectors.
Better support for teacher training and educational research can strengthen the education system from within.
This Diwali gift marks only the beginning. Through sustained targeted fiscal reforms, India can ensure that education becomes an empowering pathway rather than a financial burden, preparing learners to compete globally and contribute to the country’s growth. The GST change provides immediate relief, but its real significance lies in laying the groundwork for a brighter, stronger future.
The writer is an Assistant Professor of Taxation & Finance at GLA University, Greater Noida