New Delhi, Dec 25
Over the past years, the government has undertaken a historic wave of reforms, abolishing over 40,000 unnecessary compliances and repealing more than 1,500 outdated laws, thus creating a modern, efficient, and citizen-friendly ecosystem. The GST rate rationalisation, which came into effect from September 22 this year, was one such 'Big Bang reform' towards building a 'Viksit Bharat'.
On the 79th Independence Day, Prime Minister Narendra Modi addressed the nation and announced the introduction of next-generation GST reforms by Diwali, aimed at reducing taxes on daily-use items. "The government will bring Next Generation GST reforms, which will bring down the tax burden on the common man. It will be a Diwali gift for you," he said, ensuring that these reforms directly benefit citizens and stimulate economic activity.
According to the Finance Ministry, the rollout of GST 2.0 has started showing a positive impact on India's economy, with stronger consumption trends, higher sales across key sectors like automobiles, and improved consumer sentiment.
The passenger vehicle industry posted strong year‑on‑year gains in wholesale and retail volumes in November, driven by sustained post‑festive demand, recent GST rate cuts, and the winter wedding season. The report from ICRA said that retail sales grew 22 per cent year‑on‑year in November. The wholesale volumes rose 19 per cent YoY to 4.1 lakh units as original equipment manufacturers (OEMs) maintained production to meet demand.
Moreover, the revision in GST rates resulted in a 5 per cent growth in the revenue of states (Gross SGST+IGST settled to States) during the period from September to November of the current financial year compared to the same period of the previous financial year.
In a written reply to a question in the Rajya Sabha during the just-concluded Winter Session, Minister of State for Finance Pankaj Chaudhary said that the GST collections during September to November of the current financial year (2025-26) have risen to Rs 2,59,202 crore from Rs 2,46,197 crore in the same period of 2024-25.
The recent GST rate rationalisation and the government's continued emphasis on ease of doing business are part of the government's multi-pronged strategy to boost consumption growth in the economy. The strengthening of consumption demand is expected to have a positive impact on GST revenue.
The rate rationalisation boosted the retail credit market amid better affordability as indicated by a Credit Market Indicator (CMI) that rose to 99 in Q2 FY25 from 98 in the prior quarter. Increased retail loan demand signalled renewed consumer confidence and market optimism, according to a report from TransUnion CIBIL.
Notably, various high-frequency indicators reflect that India's economic activity has gained momentum following the GST reforms.
E-way bill generation expanded by 14.4 per cent during September and October 2025 on a year-on-year basis. At the same time, cumulative GST collection growth of 9 per cent for April-October 2025 indicates that the underlying revenue stream has remained resilient, aided by firm consumption and improved compliance, according to the government data.
According to Finance Minister Nirmala Sitharaman, after income tax and GST reforms, the next focus of the government is the simplification of the customs tax system.
- IANS
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