Is GST Rationalisation a Diwali Gift for the Common Citizen?
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Synopsis
The Central government’s recent reduction in GST rates is being hailed as a significant Diwali gift for citizens, promising to uplift demand during the festive season. This strategic move is expected to counterbalance the impacts of US tariffs, ultimately enhancing economic growth and consumer spending.
Key Takeaways
- GST rates have been reduced to boost consumer demand during the festive season.
- This reduction aims to alleviate the economic impact of US tariffs.
- Economists expect lower inflation and enhanced purchasing power.
- Essential goods and health insurance are set to see significant benefits.
- This reform is viewed as a major tax overhaul since GST's inception in 2017.
New Delhi, Sep 4 (NationPress) The Central government has offered a substantial Diwali present to the everyday citizen by slashing GST rates, according to economists. They believe that this initiative will not only enhance demand during the festive period but also mitigate the losses incurred due to recent tariffs imposed by the US.
Economist Pankaj Jaiswal remarked, "This truly represents a remarkable Diwali gesture from the government. The GST reduction will help lower inflation and enhance domestic consumption. With the festive season already in swing, this well-timed decision is highly appreciated."
He pointed out that last month's US tariffs had resulted in worries about decreasing exports and reduced production. However, this action effectively minimizes those risks. With more disposable income in the hands of the populace, the economy is anticipated to receive a positive boost, he noted.
CA Praveen Sahu mentioned that the two-tier GST framework of 5% and 18%, with nearly 80% of goods falling under the 5% category, will greatly benefit the general populace. He stated that this reform will enhance purchasing power and stimulate consumption.
Economist Rajiv Sahu characterized this as the most significant tax reform since the GST's introduction in 2017. He emphasized that it will provide immediate relief to consumers, promote spending, support industries, and fortify the overall economy.
In agreement, Chamber of Commerce General Secretary Aditya Manya Jain applauded the reform, underlining that the reduction of taxes on essential daily items will not only aid consumers but also offer relief to investors and traders. He added that this initiative will sustain the momentum of economic growth while addressing the challenges arising from international tariffs.
Economist Ajay Rotti particularly commended the reduction of GST on health insurance from 18% to zero. He deemed it excellent news for the public and a historic step that will also benefit MSMEs by lowering the costs of essential goods. This, he argued, will enhance consumption and further strengthen the economy.
Point of View
It's essential to recognize that the recent GST rate reduction signifies a pivotal moment for the Indian economy. This initiative not only seeks to ease the burden on consumers but also positions the government as responsive to global economic challenges, aligning with the nation's goal of sustainable growth.
NationPress
04/09/2025
Frequently Asked Questions
What are the new GST rates?
The government has implemented a reduction in GST rates, particularly focusing on a two-tier structure of 5% and 18%, with most goods falling under the 5% category.
How will this impact consumers?
The reduction in GST is expected to lower inflation and enhance purchasing power, allowing consumers to spend more during the festive season.
What are economists saying about this move?
Economists view this reduction as a significant tax reform, providing immediate relief to consumers and supporting overall economic growth.
How does this relate to US tariffs?
The GST reduction is seen as a strategic response to mitigate the economic impact of recent US tariffs, aiming to sustain domestic production and exports.
What sectors will benefit from the GST reduction?
Sectors such as essential goods, health insurance, and industries reliant on consumer spending are anticipated to benefit significantly from the revised GST rates.
