Good news for consumers: ₹5, ₹10 packs get a boost, say goodbye to change hassles

New Delhi (The Uttam Hindu): Everyday items are expected to be available in the market once again at popular price points of ₹2, ₹5, ₹10, and ₹20. This significant change is due to the government's reduction in GST rates and subsequent new directives to companies.

Now, instead of selling the old packs at lower prices, companies are introducing packs with slightly higher grammage at the same price. This will not only provide relief to consumers but also make it easier for retailers and brands to return to the old, popular system.

In fact, companies faced difficulties due to unclear rules after the GST rate cut, which came into effect in September 2022. Since the government did not clarify whether companies could compensate for the lower prices by increasing the weight, brands reduced the prices of their packs unevenly.

For example, a ₹5 pack of Parle-G started selling for ₹4.45 and a ₹1 candy started selling for 88 paise.

These non-round prices were a source of dissatisfaction for both customers and shopkeepers. Customers had a hard time accepting or giving change, and many shopkeepers even offered sweets or candy to cover the difference. Digital payments were charged the full amount, further exacerbating the inconvenience.

Now the government has clarified that if companies increase the weight of goods and sell them at the old prices, it will not be considered a violation of GST rules. Following this clarification, major FMCG companies like Parle, Bisleri, and Mondelez have begun preparing new packaging at the old prices.

According to an ET report, Mayank Shah, vice president of Parle Products, stated that biscuit and snack packs will now weigh 11-12% more, but the prices will remain the same (₹5, ₹10). New production has already begun in the snack industry.

However, an ET report stated that Amul has refused to revert to its previous prices for now. Amul's Managing Director, Jayen Mehta, stated that they will not change the grammage and prices of their products until the government issues a formal order. He believes the government's objective was to provide direct benefits to consumers, and if prices are kept the same by increasing the weight, consumers will not receive the clear benefit.

It's worth noting that FMCG companies have previously reduced package weight (shrinkflation) during times of inflation to maintain prices of ₹5 or ₹10. Now, these same companies are attempting to pass the benefits of GST reductions directly to consumers.