India Embraces GST Reform for Economic Growth

India’s business community has warmly welcomed Prime Minister Narendra Modi’s announcement to overhaul the Goods and Services Tax (GST), describing it as a crucial step towards boosting demand, cutting compliance burdens and supporting growth.

Simplifying the GST Framework

In his Independence Day address from the Red Fort, PM Modi said the government will simplify the GST framework by reducing the number of tax slabs. The proposal includes scrapping the current 12% and 28% rates, leaving two core slabs, 5% and 18%. Around 99% of items in the 12% category may shift to 5%, while 90% of those taxed at 28% could move to 18%.

Positive Industry Response

Pankaj Mohindroo, chairman of the India Cellular & Electronics Association (ICEA), called GST "an extraordinary reform" and said rationalising slabs would benefit both industry and consumers. "GST reforms will put more money in the pocket of consumers and it will stimulate demand and it will be good for the industry and the consumers," he was quoted as saying by news agency ANI.

Expert Opinions on GST Changes

Economist Ved Jain said eight years of GST experience make this the right time for a structural change. BJP MP and CAIT secretary general Praveen Khandelwal said it would ease pressure on small traders and MSMEs, especially before the festive season. PHDCCI’s CEO Ranjeet Mehta added that reforms expected by October would yield long-term benefits.

Looking Forward

Since its rollout in 2017, GST has unified India’s market but faced criticism over rate complexity and compliance challenges. The proposed reform aims to deliver a simpler, fairer, and more growth-friendly tax system.