In a big move to boost India’s economy, Finance Minister Nirmala Sitharaman announced that the recent GST rate cut will help drive growth. She explained that this reduction would encourage more spending and save money for consumers. Despite the challenges from increased US tariffs affecting Indian exports, the government believes the GST cut will balance things out and support the economy.
The new GST rates, which will come into effect on September 22, aim to lower prices on many goods and services. The government is working closely with industry leaders and stakeholders to ensure that these savings reach everyday shoppers. Sitharaman said that MPs and authorities are keeping a close eye to make sure the benefits are passed on to consumers, making shopping more affordable.
On the international front, the Finance Minister addressed concerns about India’s oil imports from Russia. She stated that India will continue buying Russian oil because it makes economic sense—especially since oil is one of the most expensive items the country imports. The government considers factors like price and logistics to make these decisions, and she confirmed that buying Russian oil remains a priority.
Sitharaman also touched on the impact of US tariffs, which have increased the cost of Indian exports. She assured that the GST rate cuts will encourage more domestic demand and help offset the negative effects. The government is planning additional measures to support industries and workers affected by the tariffs.
The new two-tier GST system simplifies earlier rates, reducing most goods and services to 5% or 18%. There’s also a higher 40% tax on luxury and harmful goods such as tobacco, high-end cars, yachts, and private jets—promoting fairness and increasing revenue.
To make business easier, the government has also streamlined registration, faster refunds, and reduced compliance costs, especially benefiting small businesses and startups. Sitharaman shared that Prime Minister Narendra Modi had personally asked her about improving the GST system about eight months ago. The result is GST 2.0, a revamped version designed to be simpler, reduce disputes, and provide clearer rules for businesses and states alike.
Overall, these changes aim to make India’s economy more vibrant, boost consumer spending, and support growth in challenging times.
