Next-Generation GST Reforms to Boost Consumption and GDP: Ashwini Vaishnaw

Union Minister and BJP leader Ashwini Vaishnaw on Saturday clarified that the recently unveiled next-generation GST reforms were in the works for over one-and-a-half years and have no connection to external factors, including US tariffs on Indian goods.

Addressing reporters at the party headquarters, Vaishnaw emphasized that the reforms are part of Prime Minister Narendra Modi’s vision to reform, perform, and transform India’s economy. “The preparation for these GST reforms began long before the US elections. This initiative will kickstart a transformation journey for the country,” he said.

Vaishnaw noted that the reform exercise had been finalized under PM Modi’s guidance, with external influences playing no role. He highlighted the efficiency brought by GST since its introduction in 2017, contrasting it with the pre-GST era when goods-laden trucks often formed lengthy queues at state borders. “Now, e-way bills are generated in seconds, making interstate trade seamless,” he said.

The minister also outlined the broader economic impact of the reforms. Coupled with the income tax relief announced in the 2025-26 Budget, the GST rate rationalisation is expected to stimulate consumption and accelerate economic growth. “Before 2014, the taxation system was complex, with goods taxed multiple times. GST simplified this, and the new reforms will further ease life for citizens,” Vaishnaw said.

Under the next-generation GST reforms, all daily-use goods have seen reduced tax rates, fulfilling promises made by PM Modi from the Red Fort on Independence Day. The changes are set to come into effect on September 22, coinciding with the first day of Navratri.

Vaishnaw also provided a snapshot of the economic potential of these reforms. He noted that India’s current GDP stands at ₹3.30 lakh crore, with ₹2.02 lakh crore attributed to consumption. “Even a 10% rise in consumption due to these GST reforms could add ₹20 lakh crore to GDP,” he said, highlighting the transformative potential of rationalised taxation.

The sweeping changes, described as a Diwali gift to the nation, involve significant rate cuts across multiple sectors, making essential goods more affordable while stimulating overall economic activity.

With the next-generation GST reforms, India aims not only to simplify taxation but also to strengthen domestic consumption, reduce the cost of living, and further consolidate its path toward sustainable economic growth.

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