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Key Points

Financial experts are unanimously praising the new GST reforms as a major growth-positive move. NSE CEO Ashishkumar Chauhan called it a landmark step that will improve economic growth rates. Kotak's Nilesh Shah noted these reforms will lower inflation while boosting consumer sentiment and growth. The changes are also expected to partially offset the negative impact of evolving US tariffs on India's economy.

Key Points: Experts Hail GST Reforms as Growth Positive to Offset US Tariffs

  • GST reforms expected to boost India's economic growth and investments
  • Rate rationalization to reduce tax burden on citizens and businesses
  • Reforms may partially offset adverse effects of US tariffs
  • Simplification aims to improve tax compliance and formal economy participation
3 min read

Financial sector experts hail GST reforms as growth-positive, can offset some US tariff losses

Financial leaders praise GST reforms for boosting growth, easing inflation, and partially offsetting US tariff impacts. NSE and Kotak experts call it a landmark step.

"The latest GST announcement lowers inflation, increases growth, boosts consumer sentiment - Nilesh Shah, Kotak Mahindra AMC"

New Delhi, September 4

The next-generation Goods and Services Tax (GST) reforms, announced after the GST Council meeting on Wednesday, have received strong praise from industry leaders and experts, who, in a united voice, asserted that such bold measures will strengthen economic growth, push investments, and ease of living.

Ashishkumar Chauhan, MD and CEO of the National Stock Exchange (NSE), described the reforms as a landmark step forward.

"These reforms will certainly improve economic growth rate even further," the NSE chief said.

Chauhan highlighted the broader impact of the changes. He noted that the GST reforms will reduce the overall tax burden on citizens and businesses, thereby boosting profitability, productivity, and investments that drive India's economic growth.

He also believes that it will strengthen tax compliance by simplifying structures and encouraging broader participation in the formal economy.

"The capital markets welcome these steps and stand ready to support the next phase of India's development journey," Chauhan concluded.

Nilesh Shah, Managing Director of Kotak Mahindra Asset Management Company, termed the GST slab and rate rationalisation as well as the process improvement a step in the right direction.

"The latest GST announcement lowers inflation, increases growth, boosts consumer sentiment, doesn't disturb path of fiscal consolidation, improves ease of doing business and partially offers adverse effects of tariffs," Shah said.

Shah believes that rationalisation of GST will partially help offset the adverse impact of US tariff in the quarters to come.

Aditi Nayar, Chief Economist at ICRA Ltd., also believes that the GST reforms will help offset a part of the negative impact of the evolving US tariffs.

Any revenue foregone by the Centre and the states would effectively need to be compensated through other revenue streams or expenditure rationalisation, Nayar suggested.

The GST rate cuts have a financial implication of Rs 48,000 crore on the government's exchequer in net terms, the government has estimated.

"Given the earlier-than-expected implementation of the GST rationalisation at the onset of the consumption-heavy festive period, the moderate revenue likely to be foregone in the second half of this fiscal--which would nevertheless necessitate other revenue mobilisation or expenditure-saving measures...," Nayar added.

The sweeping changes have been made under the next-generation GST (Goods and Services Tax) rationalisation just days after Prime Minister Narendra Modi announced it from the ramparts of the Red Fort on Independence Day.

This is aimed at reducing the tax burden on citizens while stimulating economic growth. The GST reforms are part of the government's efforts to stimulate economic growth and reduce the tax burden on citizens. The changes are expected to have a positive impact on various sectors, including agriculture, and drive GDP growth.

The GST Council, on Wednesday, after a threadbare discussion, approved significant rate cuts across multiple sectors, which the government has described as a Diwali gift for the nation. On the essential items front, items of daily household use will now cost less.

The 56th GST council meeting decided to rationalise GST rates to two slabs of 5 per cent and 18 per cent by merging the 12 per cent and 28 per cent rates.

- ANI

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Reader Comments

S
Sarah B
As someone working in export sector, I'm cautiously optimistic. If this can really offset US tariff impacts, it would be a game-changer for Indian manufacturing. The timing before festivals is strategic!
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Aditya G
₹48,000 crore revenue loss is significant though. Hope the government has proper plans to compensate through other means without increasing our tax burden elsewhere. The simplification from 4 slabs to 2 is much needed reform 👍
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Priya S
My small business has been struggling with GST compliance. If these reforms actually simplify the process and reduce paperwork, it will be a huge relief for millions of small entrepreneurs like me 🎯
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Michael C
While the reforms look promising, implementation has been GST's Achilles heel since beginning. Hope this time the systems are properly updated and businesses get clear guidance without last-minute confusion.
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Nisha Z
Diwali gift indeed! Lower prices on household items will help families manage inflation. Hope the rate cuts are passed on to consumers quickly. The timing before festival season is perfect 🪔

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