Prime Minister Narendra Modi hails GST reforms as transformative for India’s economy
New Delhi: Prime Minister Narendra Modi on Sunday described the new Goods and Services Tax (GST) reforms as a landmark step that will transform India’s economy, accelerate growth, and strengthen the vision of Atmanirbhar Bharat. The Prime Minister addressed the nation on the eve of the revised GST rates coming into effect, coinciding with the first day of Navratri.
Launching what he termed the GST Bachat Utsav (GST Savings Festival), Mr. Modi said the reforms would reduce prices, encourage small and medium industries, and benefit citizens across income groups. He urged people to adopt a Swadeshi mindset by using and promoting indigenous products, noting that “indigenous strength is essential for the nation’s prosperity.”
In his 19-minute address, the Prime Minister compared the role of Swadeshi in India’s freedom movement with its potential to drive economic self-reliance today. He emphasised that the government’s guiding principle is Nagrik Devo Bhava—treating citizens as the highest priority. “Every home should become a model of Swadeshi,” he said, adding that the combination of reduced GST rates and the recent income tax exemption up to ₹12 lakh amounts to a “double victory” for the people, with combined benefits estimated at ₹2.5 lakh crore.
Mr. Modi recalled the complexities and inefficiencies of India’s earlier tax regime, citing international reports that highlighted its high burden. He said the streamlining of GST has eliminated multiple taxes and addressed those long-standing challenges.
Major GST reforms announced
The revised GST system, described as the most significant reform since its introduction, has cut down the earlier 12% and 28% tax slabs to two core rates: 5% and 18%. This reduction will lower the price of nearly 90% of goods. A higher rate of 40% will apply only to luxury items and products harmful to health, such as tobacco, cigarettes, and lotteries.
Key highlights include:
- Prices of 413 products to be reduced from Monday.
- Life insurance, health insurance, general insurance, and 38 essential medicines fully exempted from GST.
- Medium-sized vehicles moved to the 18% GST bracket, with manufacturers pledging to pass on the benefits to consumers.
- RailNeer bottled water prices reduced by ₹1.
The Prime Minister concluded that with greater cooperation between the Centre and the states, GST reforms would not only deliver immediate savings to households but also lay the foundation for India’s long-term self-reliance and prosperity.
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