New Delhi, September 21: Prime Minister Narendra Modi on Sunday announced sweeping changes to India’s Goods and Services Tax (GST) regime, slashing the number of tax slabs to two and promising what he called a nationwide “GST Savings Festival” starting Sept. 22.
In a televised address coinciding with the start of the Navratri festival, Modi said the reforms would simplify taxation, reduce costs for consumers and businesses, and accelerate India’s economic growth.
Only 5% and 18% tax slabs will now remain in effect. Most everyday items will become cheaper, Modi said, citing food, medicines, soap, toothpaste, and insurance among goods and services to be tax-free or taxed at 5%. Nearly all items previously taxed at 12% will move into the lower bracket, he added.
The prime minister said the measures, combined with recent income tax relief that made earnings up to ₹12 lakh tax-free, would put more than ₹2.5 lakh crore ($30 billion) in people’s pockets. “This is why I call it a Bachat Utsav,” or festival of savings, he said.
He urged citizens to buy Indian-made products, stressing that the reforms would particularly benefit micro, small and medium enterprises (MSMEs) by lowering compliance burdens and boosting sales. India’s prosperity will draw strength from self-reliance. What the nation needs and what can be made in India should be made within India itself, Modi said.
Modi recalled that India’s 2017 GST launch had replaced a “maze of taxes” with a unified system but argued that “next-generation reforms” were needed to meet current and future aspirations.
The reforms come as Modi seeks to balance slowing global growth with strong domestic demand, and to position India as a manufacturing hub under his Aatmanirbhar Bharat campaign.
Concluding his address, Modi extended greetings for Navratri and urged state governments to actively support the reforms and Swadeshi drive. When the Centre and states move forward together, the dream of a developed India will be fulfilled, he said.
