Will GST Rate Reductions Save Consumers Rs 2 Lakh Crore?
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Synopsis
Finance Minister Nirmala Sitharaman emphasizes the significant impact of GST rate cuts, predicting a monumental Rs 2 lakh crore savings for consumers. This reform aims to ease the financial burden, enhance liquidity, and support economic growth for the nation's citizens.
Key Takeaways
- GST rate cuts projected to save Rs 2 lakh crore for consumers.
- 99% of goods now in the 5% GST slab, benefiting middle class.
- Shift to a two-slab system simplifies the tax structure.
- Reforms aim to boost farmers' incomes and promote modernization.
- Projected increase in GST revenues from Rs 7.19 lakh crore to Rs 22.08 lakh crore.
Visakhapatnam, Sep 17 (NationPress) Finance Minister Nirmala Sitharaman announced on Wednesday that the reduction in tax rates on goods and services as part of the GST 2.0 reforms is projected to lead to a staggering savings of Rs 2 lakh crore for consumers. This change allows more disposable income for the average citizen, enhancing their ability to save or spend.
During her speech at the Outreach and Interaction Programme on Next Gen GST Reforms, she emphasized that the GST Council's decision aims to alleviate the tax burden on consumers and promote liquidity within the economy.
Sitharaman pointed out that 99 percent of goods now fall under the 5 percent GST slab, which is particularly advantageous for the middle class and lower-income groups. These recent reforms signify a substantial simplification of the GST framework. The shift to a two-slab system of 5 percent and 18 percent, eliminating the previous 12 percent and 28 percent rates, has led to reduced taxes and a more transparent and manageable structure.
Additionally, the Finance Minister noted that these reforms will also enhance farmers' incomes by reducing taxes on agricultural goods, thereby encouraging modern farming practices.
She remarked that the MSME sector and job-generating industries will benefit from decreased costs, creating more opportunities. The GST reforms are expected to boost the purchasing power and savings of the average citizen throughout the nation.
Sitharaman highlighted that GST revenues have surged from Rs 7.19 lakh crore in 2018 to Rs 22.08 lakh crore projected by 2025, while the number of tax-paying entities has more than doubled from 65 lakh to 1.51 crore.
She stated that these transformative changes align with Prime Minister Narendra Modi's vision for a Viksit Bharat and Atmanirbhar Bharat. The reforms, effective from September 22, aim to simplify the tax framework and bolster economic growth. The Finance Minister expressed optimism that this historic tax overhaul will empower every citizen and strengthen India's economy.
Point of View
It is crucial to recognize the significant implications of the GST reforms announced by Finance Minister Nirmala Sitharaman. The proposed rate cuts could indeed provide substantial savings for consumers, reflecting a commitment to economic growth and stability. The focus on enhancing the purchasing power of the common man aligns with the broader vision of a self-reliant and developed India, ensuring that the benefits of such reforms are felt across all sectors of society.
NationPress
21/09/2025
Frequently Asked Questions
What are the expected savings for consumers from GST reforms?
The GST reforms are projected to save consumers around Rs 2 lakh crore, allowing for more discretionary spending and savings.
How will the GST rate cuts benefit the middle class?
With 99 percent of goods now under the 5 percent GST slab, the middle class will experience reduced tax burdens, leading to increased disposable income.
What changes have been made to the GST structure?
The GST structure has shifted to a two-slab system of 5 percent and 18 percent, eliminating the previous 12 percent and 28 percent rates, simplifying the tax framework.
How will these reforms affect farmers?
The reforms are expected to boost farmers' incomes by reducing taxes on agricultural goods, promoting modernization in farming practices.
What is the projected growth of GST revenues?
GST revenues are expected to increase from Rs 7.19 lakh crore in 2018 to Rs 22.08 lakh crore by 2025, reflecting improved compliance and economic activity.
