GST Reforms: Foundation for a Developed India

The central government has introduced reforms in the GST system, which are expected to aid the Indian economy and lay the foundation for a developed India. Experts believe this is a major step towards enhancing the ease of doing business, which will result in GDP growth and increased employment opportunities. The dual-level GST will help compensate for reduced exports and increase domestic demand.

Amid global uncertainty, the central government has taken a significant step by reforming the GST framework. This decision will not only help steer the Indian economy out of current challenges but also create a strong foundation for a developed nation. These reforms are expected to maintain India’s economic growth rate at 8% or higher over the next 2–3 years.

Some experts have called it one of the most crucial moves towards improving the 'Ease of Doing Business' in the country. It will not only ensure steady GDP growth but also promote investment and employment opportunities due to increasing demand. A more attractive Indian market will encourage more countries to sign trade agreements with India.

Dual-Level GST to Offset Export Losses

In today's uncertain economic landscape, a country’s strength lies in its domestic demand and consumption. The two-tier GST structure is expected to compensate for reduced exports caused by U.S. tariffs. Essential goods, electronics, cars, and two-wheelers will become cheaper due to lower GST rates, leading to a significant increase in demand.

Exports play a relatively small role in India’s GDP, as about 60% of the economy is still driven by domestic consumption. Therefore, rising demand for financial products, household items, and electrical appliances is directly linked to an expected growth in the current fiscal year. Additionally, with 65% of the population residing in rural areas, an increase in their purchasing power always boosts overall growth. Experts believe that the 5% GST rate on mass-consumed goods will stimulate demand in rural regions.

Expert Opinions

India Will Remain a High-Growth Economy

Jyoti Vij, Secretary General of FICCI, says that restructuring and simplifying the GST framework is a milestone in India’s economic reform journey. The reduction in the number of tax slabs and moving many goods and services to the 5% bracket is expected to spur demand, ensuring India continues on the path of being a high-growth economy.

Boosts Confidence Among Public and Industry

R. Dinesh, Chairman of the CII Economic Policy Council, noted that the entire tax system is becoming more transparent. Tax-related complexities will reduce, instilling confidence among both the public and the industrial sector—an essential factor for strengthening economic development. The reduction in taxes on widely consumed goods will have a positive impact.

We’re in This War Now – Fast Reforms Are the Need of the Hour

Anand Mahindra, Chairman of Mahindra Group, has called for accelerating the pace of reforms. He wrote on social media that India is now fully engaged in this battle. Faster reforms are the surest way to boost consumption and investment, which will lead to economic expansion and elevate India's global standing.