GST Reforms to Give ₹2 Lakh Crore to People
Finance Minister Nirmala Sitharaman announced that the GST 2.0 reforms will put nearly ₹2 lakh crore into the hands of Indian citizens. She said this amount won’t remain with the government but will return to the economy through lower prices, higher consumption, and more liquidity for households.
Key Changes Under GST 2.0
The GST slabs have been simplified from four slabs (5%, 12%, 18%, 28%) to two main slabs (5% and 8%) for many goods. Nearly 99% of goods previously in the 12% slab will now be taxed at 5%. Similarly, about 90% of goods from the 28% slab see reduced rates. Goods previously taxed at higher rates will now cost less, increasing purchasing power for citizens. The reform aims to reduce tax burden and increase domestic demand.
Expected Effects
With more disposable income, people are expected to spend more on daily needs, boosting sectors such as consumer goods, personal care, and small appliances. Increased demand may lead to more production, job creation, and economic growth.
When It Begins
The new GST rates and slab changes will take effect from September 22, 2025. These changes come just ahead of important festivals, which could further push consumption.
