Congress MP Jairam Ramesh has expressed strong criticism of the government’s latest GST reforms, calling them “GST 1.5” instead of the much-awaited “GST 2.0.” He argues that the changes do not solve the core issues faced by states or the economy.
Ramesh pointed out that the government has ignored the crucial aspect of revenue compensation to states, leaving the much-needed reform incomplete. He questioned whether these minor adjustments will really benefit the economy or if they are just superficial changes.
The Congress leader highlighted that for a long time, his party has been advocating for a proper GST 2.0. This reform should aim to reduce the number of tax rates, cut taxes on common goods and services, curb tax evasion, minimize disputes, fix the inverted duty structure (where taxes on inputs are higher than on outputs), and simplify compliance, especially for small businesses. Unfortunately, he said, the current changes fall short of these goals.
Ramesh also criticized the GST council, which is a constitutional body responsible for GST decisions. He questioned whether it is still functioning effectively or has become just a formality. He pointed out that Prime Minister Narendra Modi announced many of these reforms even before the GST council met, making the council seem less meaningful.
The congress MP reminded everyone that the initial GST rollout in 2017 had flaws. “GST 1.0 was meant to be a simple, good tax, but it turned out to be a growth-restriction,” he said, criticizing the design of the original GST.
While noting that the government claims rate cuts will benefit consumers, Ramesh warned that the real impact of these changes remains uncertain. He asked whether these reforms will actually encourage more private investment, especially in manufacturing, and help small businesses—two key factors for economic growth.
On the issue of state finances, Ramesh voiced concern that the government has yet to fulfill the crucial demand of extending GST compensation to states for another five years. He emphasized that this is vital for protecting their revenues and maintaining cooperative federalism.
Overall, Jairam Ramesh’s comments show that many believe the government’s GST changes are only partial solutions. The real reform, he says, is still waiting to happen, and key issues like revenue support for states need urgent attention.
