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Informist, Friday, Aug. 15, 2025

 

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--PM Modi: To bring next generation GST reforms by Diwali 
--CONTEXT: PM Modi addresses nation on 79th Independence Day 
--PM Modi: Inflation is under control, macroecon condition stable
--PM Modi: Global rating agencies showing faith in India econ's resilience 
--PM Modi announces Viksit Bharat employment plan with INR 1 tln outlay 
--PM Modi: Will shield nation's farmers, fishermen from all threats

 

NEW DELHI – The wait for goods and services tax reforms may finally come to an end. Prime Minister Narendra Modi Friday said that the government was reviewing the indirect tax regime and next generation reforms will be brought by Diwali. He said tax on regular-use items will be brought down significantly, which will help lower prices of such goods and also help domestic micro, small, and medium enterprises.

 

GST Council, the apex body looking into the indirect tax structure, has been deliberating over the issue of rate rationalisation and simplification of the tax structure over last few years. GST rate rationalisation, the most-looked-forward item in the council's agenda, was taken up in the December meeting but no decision was taken as all members were of the view that more details need to be worked out before rate changes can be announced. 

 

The government is proposing significant reforms in GST, finance ministry said in post on social media platform X. "It will be focused on three pillars, namely structural reforms, rate rationalisation and ease of living," the post said. Center has sent its proposal on GST rate rationalisation and reforms to the Group of Ministers constituted by the GST Council to examine this issue.

 

"Key areas identified for next-generation reforms include the rationalisation of tax rates to benefit all sections of society, especially the common man, women, students, middle class, and farmers. Reforms will also seek to reduce classification-related disputes, correcting inverted duty structures in specific sectors, ensuring greater rate stability, and further enhancing ease of doing business," the ministry said.

 

Bihar Deputy Chief Minister Samrat Choudhury heads the six-member Group of Ministers, tasked with recommending trimming the list of items exempt from GST, reassessing tax rates, and correcting inverted duty structures. As part of their recommendations, the panel had proposed in the interim report suggesting rate tweaks on 148 items that could likely help the government raise an additional INR 220 billion per year. The proposed changes are aimed at raising taxes on luxury and sin goods on one hand and provide relief on essential items on the other.

 

Modi said that Indian economy is a bright spot amid global uncertainties. He said the country has robust foreign exchange reserves, inflation is under control and macroeconomic indicators are strong. Such tailwinds to the economy should be utilised to support and improve the lives of the lower strata of the population, he said. Referring to India's rating upgrade by S&P Global Ratings on Thursday to 'BBB' from 'BBB-', Modi said global rating agencies are also appreciating India's financial discipline and showing faith in economic resilience. S&P cited the Indian economy's resilience and sustained fiscal consolidation for the rating upgrade. The ratings agency had cited the same reason when it raised its outlook on India's long-term rating to 'positive' from 'stable' in May last year.

 

He also rolled out Pradhan Mantri Viksit Bharat Rozgaar Yojana with an outlay of INR 1 trillion. Under the scheme individuals getting employment in private sector will get INR 15,000 from government, he said. Companies providing job opportunities to the youth will also be incentivised, he added.

 

Earlier, the Union Cabinet had approved the scheme for creation of more than 35 million jobs in the country over a period of two years. Out of these, 19.2 million beneficiaries would be the first timers entering the workforce. The benefits of the Scheme would be applicable to jobs created between Aug. 1 and Jul. 31, 2027, a government release had said.

 

In a veiled response to the US' demand to get access to India's farm and dairy market, Modi said farmers and fishermen will be shielded from any policy that may have any adverse effect on them. He said his government will never accept any agreement that may harm farm sector, dairy industry or domestic fisheries. The US also wants to push its genetically modified crops into the Indian market. US President Donald Trump had on Jul. 30 announced a 25% tariff on Indian goods shipped to the US. An additional 25% tariff was imposed on Indian goods being shipped to the US for maintaining a trade relationship with Russia, especially for procuring Russian crude oil. This additional 25% tariff will be collected from Aug. 27.  End

 

Reported by Sagar Sen

Edited by Akul Nishant Akhoury

 

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