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As the next generation of GST reforms sets in motion, the Indian economy enters a new era of transformation driven by confidence and dynamism acquired in the last eleven years of unprecedented accomplishments. It’s a huge Diwali gift, which was announced by Prime Minister Shri Narendra Modi from the ramparts of the Red Fort on this year’s Independence Day. While a series of reforms in the last eleven years have transformed the Indian economy from ‘Fragile Five’ to ‘Top Five,’ the world is now acknowledging India’s growing strength, accepting it as the brightest star amid the gloomy global economic scenario. Among many path-breaking reforms, GST is considered to be a game changer, which has realised the dream of unifying the Indian economy under the mantra of ‘One Nation, One Tax.’ The positive impact of GST soon after the huge relief in income tax can be seen in the new taxpayer-friendly regime with reduced compliance costs and improved financial health of the nation. The GST has yielded significant economic benefits across the economy with reduced inflation, increased GDP growth rate, improved demand buoyancy, and long-term fiscal stability while reducing taxes for the people. It can be summed up as a significant pro-people initiative empowering the nation with the lowering of taxes.
As the GST Council in its 56th meeting ratified broad-based critical amendments in the GST rate structures and processes, the number of the GST rate structures gets reduced from the existing four slabs to two, with the new rates set at 5% and 18%. This is in line with the commitment of the Hon’ble Prime Minister Shri Narendra Modi to bring down the tax burden on the common man by introducing next-generation GST reforms. These reforms are aimed at ‘ease of living’ and strengthening the Indian economy with a focus on the common man and are expected to have a net positive impact on the GDP. All changes in the GST rate of goods and services will be implemented effective on 22nd September, 2025. The next generation GST reforms in 2025 mark a transformative and citizen-centric step in India’s indirect tax system. These reforms significantly reduce the tax burden on essential daily items, healthcare, education, agriculture, automobiles, and electronics, thereby easing living costs for the people. The streamlined compliance processes, automatic registrations, and faster refunds will particularly benefit MSMEs and small traders. These reforms will not only ease the burden on households and enterprises but also reinforce India’s growth trajectory. By balancing fiscal prudence with inclusive measures, they mark a significant step toward strengthening the economy and advancing the vision of a simpler, more efficient GST regime.
As India continues to receive global acclaim for its economic performance, the implementation of next generation GST reforms marks a significant policy milestone representing the Modi government’s commitment to simplifying taxation while supporting consumption and maintaining buoyancy in the economy realizing the vision of ‘Viksit Bharat’
Today, India continues to be the fastest-growing major economy in the world. Most recently the Q1 FY26 GDP has surged to 7.8%, marking the fastest growth in five quarters and significantly beating economist forecasts of 6.5-6.7%. The global agencies such as Fitch Ratings, IMF, OECD, Asian Development Bank (ADB), World Bank, Morgan Stanley, and CRISIL have rated the Indian economy in highly positive terms and upgraded their assessments. While global growth is projected at just 3.0% for 2025, India’s 6.4% plus growth rate demonstrates exceptional resilience, as it is projected to contribute 20% of global economic growth by 2028, cementing its role as a key driver of the world economy. As India continues to receive global acclaim for its economic performance, the implementation of next-generation GST reforms marks a significant policy milestone representing the Modi government’s commitment to simplifying taxation while supporting consumption and maintaining buoyancy in the economy, realizing the vision of ‘Viksit Bharat.’ There is no doubt that the next generation GST reforms will further set the momentum for India’s major leap as the third largest economy in the world.