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Key Points

The Indian government has simplified the GST framework, reducing the number of tax slabs. This reform has led to significant tax cuts on hundreds of everyday items. Ministers state this will make essentials more affordable and boost consumer spending. The move is projected to add a massive Rs 20 lakh crore to the country's GDP.

Key Points: Ashwini Vaishnaw Says GST Reform to Boost GDP by Rs 20 Lakh Crore

  • GST slabs reduced from four to two rates of 5% and 18% for most goods
  • Taxes cut on 370 items including cement, footwear, and life-saving drugs
  • Reform aims to increase disposable income and boost overall consumer demand
  • New structure contrasts with previous UPA government's inaction on tax reform
2 min read

GST reform to boost GDP by Rs 20 lakh crore: Ashwini Vaishnaw

Union Minister Ashwini Vaishnaw states GST simplification will boost India's GDP by Rs 20 lakh crore, making essentials cheaper and business easier.

"This decision to reduce GST will take the country's economy to new heights. - Ramdas Athawale"

New Delhi, Sep 18

Union Electronics and IT Minister Ashwini Vaishnaw on Monday said that the simplification of the Goods and Services Tax (GST) framework will make doing business in India easier and boost overall demand, adding nearly Rs 20 lakh crore to the country’s GDP.

Speaking to the media, Vaishnaw stated that the reform is being welcomed nationwide because it enables people to save a greater portion of their income and makes the majority of everyday necessities more affordable.

Targeting the opposition, the minister said that while "there was only talk and no action" under the UPA administration, the NDA government has provided tangible relief through the GST.

He gave several examples of lower tax rates, including the following: cement, which previously had a 30 per cent tax, is now subject to an 18 per cent tax; sanitary pads, which were previously subject to a 13 percent tax, are now completely exempt; footwear, which was previously subject to an 18 percent tax, is now only 5 per cent; refrigerators are now only 18 percent taxed; and detergents are no longer taxed.

Taxes on almost 370 items, including everyday necessities and life-saving medications, have been reduced overall. Previously subject to 5, 12, or 18 per cent GST, several items are now tax-free.

Union Finance Minister Nirmala Sitharaman has said that the reform will inject an additional Rs 2 lakh crore into the economy by enhancing consumers’ disposable income.

Under the new structure, GST slabs have been reduced from four — 5, 12, 18 and 28 per cent — to two: 5 per cent and 18 per cent. A special 40 per cent rate will apply to luxury and sin goods.

Union Minister Ramdas Athawale also lauded the reforms and said they would take India's economy to greater heights.

Speaking to IANS, he said: "I believe that Prime Minister Narendra Modi has taken several good decisions in his 11 years, but this decision to reduce GST will take the country's economy to new heights. This decision to reduce GST will be very beneficial for the common man."

He also stressed the Prime Minister's appeal to encourage local businesses.

- IANS

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Reader Comments

R
Rohit P
As a small business owner, I'm cautiously optimistic. The simplification from 4 slabs to 2 will definitely reduce compliance burden. But I hope the implementation is smooth - last time there were many technical glitches in the GST portal.
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Aditya G
Reducing cement tax from 30% to 18% should help bring down construction costs. This could make housing more affordable for middle-class families. Good move for the real estate sector!
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Sarah B
While the tax cuts are welcome, I'm concerned about the revenue impact. How will the government make up for the shortfall? Hope this doesn't affect spending on healthcare and education in the long run.
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Karthik V
The reduction in footwear GST from 18% to 5% is excellent news! Footwear is a basic necessity, especially for school-going children from economically weaker sections. This will definitely help poor families.
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Michael C
As an expat living in India, I appreciate the government's efforts to simplify the tax system. Making everyday items more affordable will boost consumer spending and attract more foreign investment. Smart economic move!
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Neha E
I hope the benefits actually reach consumers. Sometimes companies don't pass on the tax cuts to customers. Government should monitor this closely. Otherwise, it's just good news on

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