Bahut Bada Tohfa: PM Modi Promises Double Diwali, Announces Next-Gen GST With Lower Taxes
'I am going to give a great gift this Diwali. Over the past eight years, we implemented a major GST reform and simplified taxes. Now is the time for a review. We have conducted it, consulted with states, and are set to introduce a 'next-generation GST reform',' the Prime Minister declared from the Red Fort.
Current GST Structure And Proposed Changes
Currently, GST rates are divided into five main slabs, ranging from 0 per cent to 28 per cent, with 12 and 18 per cent acting as the standard rates for a broad range of goods and services. Approximately 21 per cent of goods fall under the 5 per cent category, 19 per cent under 12 per cent, and 44 per cent under the 18 per cent slab.
According to sources, the government is considering removing the 12 per cent slab and reallocating these items between the 5 per cent and 18 per cent categories, though the precise details of the reform are yet to be finalised.
Also Read: PM Announces Mission 'Sudarshan Chakra' To Strengthen India's Defence By 2035
Economic Benefits: Cheaper Essentials And Boost To MSMEs
'This will be a Diwali gift; taxes on essential services for individuals will be reduced substantially. MSMEs will benefit, the daily needs products will be cheaper, and it will also give a boost to the economy,' asserted PM Modi.
The proposed 'next-generation GST' is expected to form a pivotal part of the government's economic agenda, aimed at stimulating consumption and providing fresh momentum to the nation's growth, especially amid economic uncertainty triggered by tariff announcements from US President Donald Trump.
Calls For GST Reduction To Ease Consumer Burden
There have been persistent demands for lower GST rates to encourage consumer spending and ease the financial burden on households and businesses. While lower rates may initially reduce government tax revenue, experts suggest that increased sales volumes and enhanced compliance, resulting from a simpler and more affordable tax system, would eventually compensate for any revenue shortfall.
The Prime Minister also emphasised the growing contribution of women to India's economic and social progress, stating, 'Every sector now proudly acknowledges the strength of our nari shakti.'
'From start-ups to the space sector, from the playing fields to the armed forces, our daughters are making their mark. Today, with pride, women stand shoulder to shoulder in the country's journey of development,' he said.
He recalled the pride felt nationwide when the first batch of women cadets graduated from the National Defence Academy (NDA). 'The whole country was filled with pride at that historic moment,' he remarked.
Modi also lauded the transformative impact of self-help groups (SHGs) and mentioned the 'NaMo Drone Didi' initiative, which has empowered rural women. Sharing an anecdote, he said, 'In a village, a sister told me that people now call her a pilot. She proudly said that though she was not highly educated, her stature had grown.'
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