Garhwal Post Bureau
Dehradun, 21 Oct: The Union and State Governments have claimed that the reduction in Goods and Services Tax (GST) on Pahadi tur dal, red rice and Lakhori chilli to five percent has provided a significant fillip to the hill economy of Uttarakhand. It is also claimed that the GST reforms are benefitting small farmers across the state. Similarly, the cut in GST to five percent on hotel tariffs up to Rs 7,500 has given relief to the tourism industry, positively impacting nearly 80,000 people engaged in the sector.
The Government has further claimed that lowering GST to five percent on Aipan art, Ringal crafts and woollen products has revitalised the handicraft sector, particularly aiding women-led enterprises and traditional artisans. A reduction of GST from twenty-eight percent to eighteen percent on automobiles has further encouraged the auto industry, making vehicles 8 to 10 percent cheaper and generating nearly 50,000 jobs.
Uttarakhand is a state where terraced farming coexists with spiritual tourism, and traditional crafts blend seamlessly with emerging industries. From the red rice fields of Purola to the bustling homestays of Nainital and Mussoorie, the state’s economy embodies a harmonious balance of nature, tradition and enterprise.
The officials have claimed that the recent reduction in GST rates has come as a timely stimulus to the hill economy, bringing tax relief across agriculture, tourism, handicrafts and manufacturing sectors. By cutting tax rates on key products and services such as hill tur dal, red rice, handlooms, woollens and hospitality, the reforms aim to enhance affordability, empower small producers and attract investment in environmentally sustainable and high-value sectors of the state.
These reforms align with Uttarakhand’s vision of sustainable development that seeks to strengthen livelihoods in the hills while consolidating emerging industrial hubs in the plains.
It is also claimed that, in the agricultural sector, hill tur dal cultivated in Chamoli, Almora, Tehri, Nainital and Pithoragarh by small rain-fed farmers under the traditional ‘Barahnaja’ mixed cropping system, is now expected to become more affordable with the GST rate reduced from twelve percent to five percent. Known for its organic quality and nutritional value, it forms an integral part of Uttarakhand’s traditional cuisine. The change is likely to make it more competitive in the organic and health food markets while improving income prospects for small and marginal farmers.
The red rice of Uttarakhand, cultivated mainly in Purola and Mori, is valued for its cultural heritage and contribution to hill agro-biodiversity. The reduction of GST from twelve to five percent is expected to make it more competitive in packaged and health food markets, directly and indirectly benefiting around 4,000 people involved in its cultivation. It will create local employment and promote sustainable hill agriculture.
Similarly, Almora’s GI-tagged Lakhori chilli, famous for its distinct aroma and taste, is set to gain market competitiveness with the GST cut from twelve to five percent, benefiting nearly 5,000 people engaged in its production and trade. The measure will strengthen the market presence of this traditional spice while boosting farmer incomes.
The government further claims that tourism and cottage industries are also witnessing the benefits of tax reforms. Tourism, including hotels and restaurants, contributes 13.57 percent to the state’s Gross State Domestic Product (GSDP) and provides employment to about 80,000 people. With GST on hotel tariffs up to Rs 7,500 slashed from twelve to five percent, travel is expected to become more affordable, benefitting small hotels, restaurants and homestays in Nainital, Mussoorie, Auli, Chopta, Munsyari, Haridwar and Rishikesh.
The traditional Aipan art of Kumaon, prevalent in Almora, Bageshwar and Nainital, has also received a boost with GST reduced from twelve to five percent. This reform is expected to benefit nearly 4,000 artisans, particularly women entrepreneurs, while enhancing the value of GI-tagged crafts and expanding local markets for decorative and utility products.
The officials assert that in the woollen craft sector, handmade sweaters, caps and socks woven by hill women form an important seasonal cottage industry. The reduction of GST from twelve to five percent is expected to bring down prices by about 6 to 7 percent, supporting nearly 10,000 livelihoods and helping small producers earn better margins during the tourist season.
The Ringal bamboo craft, prominent in Pithoragarh, Champawat and Nainital, has also benefitted from the five percent GST rate. This small bamboo species supports a large section of Scheduled Caste and Scheduled Tribe communities. A study in the Garhwal Himalayas found that nearly 47.65 percent of hill families derive some income from bamboo-based crafts, underlining its role in sustaining rural livelihoods.
Traditional woollen products such as ‘Pankhi’, shawls and stoles, handwoven from local sheep wool in Chamoli, Uttarkashi and Bageshwar, are integral to the state’s craft heritage. The GST reduction from twelve to five percent is expected to boost their sales at fairs and online platforms, thus helping preserve traditional craftsmanship and support hill women artisans dependent on this cottage industry.
The officials also stress that, in the manufacturing sector, the food processing sector comprising 383 registered units, mainly in Rudrapur and employing around 30,000 people, will benefit from the GST cut from twelve to five percent. The change is expected to improve margins, encourage value addition and attract investment in fruit processing, herbal and organic food industries, thereby strengthening the agro-industrial base of the state.
The automobile manufacturing hubs of Pantnagar, Rudrapur, Haridwar and Kashipur, employing around 50,000 people directly and indirectly, are also set to gain. The GST reduction from twenty-eight percent to eighteen percent on vehicles up to 1,200 cc (petrol) and 1,500 cc (diesel) is likely to lower prices by 8 to 10 percent, boost domestic demand and create new employment opportunities along the automobile value chain.
In the SIDCUL industrial area, the Medical Device Park, employing about 4,000 people, will also benefit from the GST cut from twelve to five percent. This will reduce production costs, improve competitiveness and encourage investment in healthcare manufacturing, further strengthening Uttarakhand’s medical technology sector.
A Union Government’s press communique issued today concludes that the GST reforms have brought comprehensive benefits to Uttarakhand’s economy, from small hill farmers cultivating traditional crops to women artisans preserving Aipan and Ringal crafts, and from homestay owners in Rishikesh to industrial workers in Rudrapur. By reducing tax burdens and improving competitiveness, these reforms are poised to strengthen livelihood security, tourism, MSME development and green entrepreneurship, thereby bridging the gap between the hills and the marketplace and advancing Uttarakhand’s vision of inclusive, sustainable and self-reliant growth.
