Union Finance Minister Nirmala Sitharaman has announced a major boost to the Indian economy through the latest Goods and Services Tax (GST) reforms, projected to inject approximately Rs 2 lakh crore, stimulating demand across various sectors.
Speaking at an event in Kolkata, Sitharaman said the “new generation GST reforms” are aimed at cutting tax rates, easing compliance, and removing ambiguities, directly benefiting the poor, middle class, farmers, MSMEs, and multiple industries in West Bengal.
“The GST Council’s decision to reduce rates was possible because of the cooperative spirit among states. There is no donor-donee model in GST. If revenues fall, the Centre bears it equally, and after devolution, our share is even smaller,” she said.
Key Benefits for West Bengal and Small Industries
The reforms are expected to significantly benefit sectors like handicrafts, garments, tea, jute, and agro-products, supporting festive sales in the state. Products such as ‘Nakshi Kantha’, Malda mangoes, Darjeeling tea, hosiery, and jute bags will now see lower GST rates, boosting consumption during the festive season.
The new GST rates, primarily 5% and 18%, will come into effect from September 22, the first day of Navratri, strategically chosen to coincide with Durga Puja, West Bengal’s largest festival.
“Durga Puja is a time of major purchases. The timing ensures consumers benefit from the reduced tax burden,” the Finance Minister added.
Simplification of GST Slabs
India has now largely moved from four GST slabs to two, though Sitharaman indicated that the country is not yet ready for a single GST rate, leaving that possibility for the future. The reforms have also plugged revenue leakages caused by misclassification and loopholes, such as differential tax treatment of certain products like popcorn varieties.
Impact on the Economy
The Finance Minister hailed GST as one of India’s biggest reforms, noting that these changes will spur growth, particularly in small-scale and craft-based industries, while boosting nationwide consumption.
With these reforms, consumers can expect lower taxes on essential and festive goods, businesses will enjoy simpler compliance, and the overall economy is poised for a significant boost of Rs 2 lakh crore.
Source: The Economic Times