GST 2.0: India’s economy is all set to receive a massive consumption boost in the festive season with the landmark ‘GST Reform 2.0’, that has cut the tax slabs from four to two, aiming to push demand-led growth. The move, coupled with the recent income tax cuts, is significant for the middle-class, amid the US tariff pressure, that weighs on India’s economic growth.
The Goods and Services Tax (GST) Council, chaired by finance minister Nirmala Sitharaman, approved limiting slabs to 5 and 18%, effective from Sept. 22, the first day of Navaratri. A new 40% tax rate will be applicable on luxury and sin items. The GST tax rate cuts aim to put more money in the hands of the common man, to drive the country’s purchasing power and simplify the tax regime, especially for MSMEs and entrepreneurs.
In the current economic scenario, Amitabh Kant, India’s G20 Sherpa (till June 2025), and the former chief executive officer (CEO) of Niti Aayog, spoke to NDTV in an exclusive interview, termed the GST 2.0 as a ‘landmark move’ for the economy, which will be a major thrust to consumption.
In the backdrop of US tariff pressure, Kant said that India’s response to US should be ‘action and delivery’ and that internal reforms are critical to do the same. The top official also believes that GST 2.0 alone cannot fulfil India’s long-term consumption story, and the country needs ‘good quality job creation’.
