Prime Minister Narendra Modi announced major GST reforms on Sunday, kicking off what he called the “Next Generation GST” starting September 22. He tied the changes to India’s self-reliance push under the Aatmanirbhar Bharat initiative and promised a nationwide “GST Bachat Utsav” to help everyday people save money during the festive season.
In his address, Modi highlighted how the updates would make life easier for the poor, middle class, farmers, women, traders, and entrepreneurs. “From tomorrow, your savings will go up, and you’ll find it simpler to buy your favorite things,” he said. He described it as a festive gift that speeds up India’s growth, simplifies business, draws in investments, and treats every state as an equal partner.
Modi recalled the 2017 GST launch, which replaced a messy web of taxes like octroi, entry tax, sales tax, excise duty, and service tax. “That step changed an old system and wrote new history for our traders and people,” he added, noting the reforms align with Navratri’s start for added celebration.
But the Congress party quickly fired back, calling the GST a “Growth-Suppressing Tax” and slamming the reforms as too little, too late. Senior leader Jairam Ramesh took to X to criticize Modi for taking full credit for changes approved by the GST Council, a constitutional body with input from states.
Ramesh pointed out long-standing problems with GST: too many tax slabs, steep rates on everyday essentials, widespread evasion and misclassification, sky-high compliance costs, and an inverted duty structure where inputs cost more to tax than outputs. “We’ve pushed for GST 2.0 since July 2017—it was a big promise in our 2024 Lok Sabha manifesto,” he wrote.
He argued the latest tweaks don’t fix key issues hurting small businesses. MSMEs, which drive most jobs in India, still face big hurdles, Ramesh said. Solutions include raising thresholds for interstate sales, sorting out sector-specific woes in textiles, tourism, exports, handicrafts, and farm inputs, and pushing states toward their own GST for electricity, alcohol, petroleum, and real estate.
Ramesh also called for extending revenue compensation to states for another five years to honor cooperative federalism. He questioned if these eight-year-delayed changes will truly spark private investment and lift GDP growth. Meanwhile, India’s trade deficit with China has doubled to over $100 billion in five years, and local businesses grapple with fears and market dominance, pushing many entrepreneurs to move overseas, he warned.
As GST reforms roll out amid high hopes from the government, opposition voices like Congress urge deeper fixes to make the tax system truly boost India’s economy.
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