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| GST 2.0: Another step towards self-reliant India | | | Prof. Mahesh Chand Gupta | 9/8/2025 10:42:56 PM |
| Fulfilling the promise made by Prime Minister Narendra Modi on Independence Day, before Diwali, the government has given the public a gift in the form of GST reform, which will not only simplify the life of the common man but will also bring the dream of a developed India by 2047 to the ground more strongly. GST 2.0 is not just a tax reform but a map of India's next economic journey. While the countrymen are happy, this reform also has a deep international message. This reform is India's answer to the 50 percent tariff imposed by America in the form of its economic strength and self-reliance.
Farmers, women, youth, middle class, small traders and consumers will all benefit from GST reform. This step is not just an attempt to simplify the tax system but is a decisive turning point towards transforming India into a fast, strong and self-reliant economy. This reform will not only provide relief to the common people at the domestic level, but will also strengthen India's strong image at the international level.
Prime Minister Narendra Modi has also underlined the need for changes. Modi has said that if India has to get a proper place in the global scenario, then changes from time to time are very important. These reforms will give the country a double dose of support and growth.
The poor, middle class, women, students, farmers and youth will directly benefit from this. The Prime Minister has also reiterated that this reform is not just a change in tax, but is a next generation reform for self-reliant India.
the government has not taken this decision in a hurry but it has taken special care of social balance in this reform. 40 percent tax has been imposed on tobacco products, cigarettes, alcohol, expensive cars, aircraft etc. but this will directly affect the rich class while the poor and middle class will get cheap essential commodities. The biggest impact of GST 2.0 will be that consumers will get cheaper goods and domestic consumption will increase. Economic experts believe that when consumption increases, the scope of production and trade will also increase. Companies will be in a position to hire more employees, which will increase employment opportunities. Thus GST reform and Pradhan Mantri Vikasit Bharat Rojgar Yojana together will give impetus to the economy. Consumers will get cheaper goods and the younger generation will get employment opportunities. This balance will bring both short-term relief and long-term development. Historically, the Goods and Services Tax (GST) implemented on 1 July 2017 was the biggest indirect tax reform after independence.
It created a common national market in the country by removing 17 central and state taxes and implementing 'one nation one tax'. GST has continuously evolved in eight years and now through digitalization and rate rationalization, it has become the backbone of the Indian tax system. In view of the rapidly changing nature of the economy, it had become necessary to make the tax system simple and practical.
Understanding this need, the government has put forward a reform in the form of GST 2.0 which is well thought out and public friendly from a broad perspective. The biggest change in GST 2.0 is the reduction in the number of tax slabs. Earlier there were four major rates i.e. 5 percent, 12 percent, 18 percent and 28 percent. Now these have been reduced to just two. There will be a 5 percent tax on essential goods and 18 percent on general goods. This will provide direct relief to consumers. Keeping farmers and rural economy in mind, tax on tractors, agricultural equipment, handicrafts and marble has been reduced from 12 percent to 5 percent. Its effect will be far-reaching because the cost of agriculture will be reduced, which will increase the vibrancy in rural markets. The government has kept some items out of the tax purview. Its purpose is that the basic necessities related to the life of the common man should be cheaper and their burden should not increase on the pocket of the common man. Consumers will be the biggest beneficiaries of GST 2.0. When essential goods become cheaper, the monthly savings of common families will increase. If farmers get equipment at low cost, production will increase.
Small traders and shopkeepers will get relief from the complexity of tax, which will make their business easier. Making life and health insurance tax free is a big step. Reducing tax on 33 life saving medicines including cancer is also commendable.
Women will get household items at a lower price. New employment opportunities will be created for the youth, as increasing consumption will inspire industries to increase production. In this way, this reform will not be limited to figures but will bring positive change in the lives of every section.
This reform has come at a time when America has imposed a tariff of up to 50 percent on India. The Donald Trump administration has justified these tariffs in its national interest, but India has responded to this not with any political rhetoric but with solid economic reform. GST 2.0 is a symbol of the fact that India is on the path of making its economy self-reliant and strong. This step is a clear message to the global community that India is not afraid of challenges but is a country that turns them into opportunities. The possible loss caused by American tariffs can be compensated by strengthening domestic consumption. This strategy will make India economically stronger.
India is dreaming of becoming a developed nation by 2047. GST 2.0 is an important link in that direction. This reform is not just a change in tax rates but a change in thinking. This is a thought that keeps the common man at the center and also prepares India to face global competition. In the rapidly changing economic conditions of the world, India will have to keep both its policy and vision updated. GST 2.0 is a solid start in this direction, the result of which will play an important role in keeping India the fastest growing economy in the coming years.
With GST reforms, the government has made it clear that now the goal is not only to make policy but to show results by implementing it on the ground. This reform matters for everyone from farmers to urban consumers, small shopkeepers to big industries. This is not just a tax reform, but a new chapter of India's economic self-reliance.
Although these reforms will cause an annual revenue loss of Rs 47,700 crore to the government, but everyone is confident of compensating it with the possibility of a boom in the markets. It is believed that while tax rates will be balanced, tax evasion will stop while tax rates will increase. SBI Research estimates that due to tax cuts, shopping will increase and consumption in the economy will increase by up to Rs 1.98 lakh crore. The country's leading industrialists and economists believe that this reform will further accelerate India's economic pace. This can take India's GDP growth rate above 8 percent. Economists believe that this is the perfect policy to increase demand and strengthen domestic production. India will now show what a dead economy looks like. Trump had described India as a dead economy. The government also claims that with a simple tax system, people will pay more taxes, which will increase revenue. When revenue increases, the government will have more resources to spend on development projects. There will also be a positive impact of increasing demand for Swadeshi. Modi has also called for adopting Swadeshi. However, it would be too early to assume that all problems will end with the mere announcement of GST reforms. The real challenge is its effective implementation. The consent of the state governments, the efficiency of the administrative system and control over preventing tax evasion will tell how successful this reform is. It will take at least six months for the expected results to come.
The author is a renowned educationist, philosopher, thinker and speaker. He has been a professor at Delhi University for 44 years. |
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