NewKerala.com

GST 2.0's Spending Boost Fades, But Credit Card Growth Stays Strong

The initial consumer spending boost from GST 2.0 has quickly faded, with total card spends declining sharply by 11.9% month-on-month in November 2025 following the festive season. However, the underlying trend remains resilient, evidenced by an 11.5% year-on-year growth in spending and a strong 27.3% YoY surge in transaction volumes. Card issuance continues its steady momentum, adding 0.85 million new cards in November led by major banks like HDFC and SBI. The data suggests that while short-term discretionary spending has moderated, the structural shift towards card-based payments and digital adoption remains firmly intact.

Key Points: GST 2.0 Impact Short-Lived as Card Spending Moderates

  • Card spends fell 11.9% MoM
  • Card issuance grew 7.1% YoY
  • Transaction volume up 27.3% YoY
  • HDFC Bank led new card issuances
2 min read

Impact of GST 2.0 short-lived as Credit Card spends moderate, issuance remains healthy: Report

Report shows credit card spending fell 11.9% MoM post-festive season, but issuance remains healthy with 7.1% YoY growth, indicating resilient long-term trends.

"Impact of GST 2.0 Proves to be Short-lived as the Spending Moderate - Asit C. Mehta Investment Intermediates Report"

New Delhi, December 25

The impact of GST 2.0 on consumer spending has proved to be short-lived, with card spends moderating after the festive season, even as new card issuance remained healthy, according to a report by Asit C. Mehta Investment Intermediates Limited, a SEBI-registered stock broker.

The report said total card spends declined to Rs 1,887 billion in November 2025 from Rs 2,141 billion in October 2025.

This marked a sharp month-on-month (MoM) decline of 11.9 per cent, reflecting moderation in discretionary spending following the festive push. However, on a year-on-year (YoY) basis, total spending still rose by 11.5 per cent, indicating underlying resilience in consumer demand.

It stated "Impact of GST 2.0 Proves to be Short-lived as the Spending Moderate".

The report noted that while the initial boost from GST 2.0 faded quickly, card issuance continued to show steady momentum. The total number of cards outstanding stood at 115 million in November 2025 compared to 114 million in October 2025.

On a YoY basis, this represents an increase of around 7.1 per cent, with a total addition of 0.9 million cards, underscoring sustained interest in card-based payments.

In terms of transaction activity, the total volume of transactions declined to 501 million in November 2025 from 516 million in October 2025, a fall of 3 per cent MoM.

Despite this sequential decline, transaction volumes registered a strong growth of 27.3 per cent on a YoY basis, highlighting the continued expansion in the usage of cards for everyday payments.

The report also pointed to a moderation in spending intensity. Average spend per card fell to Rs 16,431 in November 2025 from Rs 18,784 in October 2025, translating into a decline of 12.5 per cent MoM.

However, on a YoY basis, the average spend per card increased by 4.1 per cent, suggesting that while short-term spending softened, longer-term consumption trends remain positive.

Card issuance data showed a steady addition to cards-in-force during the month. A total of 0.85 million cards were issued in November, taking the total cards-in-force to 114.9 million.

Among major banks, HDFC Bank led issuance with 0.21 million new cards, followed by State Bank of India with 0.11 million, ICICI Bank with 0.11 million, and Axis Bank with 0.07 million.

Within mid-sized banks, Federal Bank led issuance with 0.12 million new cards, followed by IDFC First Bank with 0.08 million cards.

Overall, the report said the data suggests that while the post-GST 2.0 spending boost and festive demand have tapered off, the structural growth in card adoption remains intact, supported by steady issuance and strong year-on-year growth in transactions.

- ANI

Share this article:

Reader Comments

P
Priya S
The fact that card issuance is still growing is the real story. More people are entering the formal digital economy, which is excellent for the long term. Short-term spending dips after festivals are normal. YoY growth is still positive! 👍
R
Rohit P
Average spend down by 12.5% MoM is quite a drop. It shows that middle-class families are tightening their belts post-festivities. EMIs from Diwali purchases kick in, and people cut back on other expenses. Very relatable data.
S
Sarah B
As someone who recently got a Federal Bank card, I'm part of that issuance statistic! The offers for new cards are still very aggressive. Banks are pushing hard, even if we're not spending as much on them currently.
V
Vikram M
While the report is insightful, I wish it delved deeper into *why* GST 2.0's impact was short-lived. Was the benefit not passed on effectively, or did inflation eat it up? The headline boost fades, but we need to understand the root cause for better policy.
K
Kavya N
Transaction volume growth of 27% YoY is huge! This means people are using cards for chai-pani and kirana stores now, not just big purchases. That's a silent, structural shift towards a less-cash economy. More important than festive spikes.

We welcome thoughtful discussions from our readers. Please keep comments respectful and on-topic.

Leave a Comment

Minimum 50 characters 0/50