At a recent press conference held at the Bharatiya Janata Party (BJP) headquarters, Union Minister Ashwini Vaishnaw answered questions about the new generation Goods and Services Tax (GST) reforms and denied the allegations linking it to external factors like US tariffs. He made it clear that these reforms were initiated more than a year ago, much before the US elections, and it reflects the government's strong commitment to economic transformation.
Financial Express quoted Ashwini Vaishnaw saying, "Preparations for GST reforms began about a year and a half ago, before the US elections. This initiative was taken keeping in mind Prime Minister Modi's clear objective 'Reform, Perform and Transform'. This GST reform will mark the beginning of a transformational journey in the country." He also pointed out that these changes are completely indigenous and not influenced by any international trade relations.
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Emphasising on the internal nature of this reform process, the minister said, "This one-and-a-half-year-long GST reform process is now complete… PM Modi has guided us at every step… External factors have no contribution to these reforms."
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Recalling the times before GST, Vaishnav underlined the major reforms in trade and logistics that took place after the implementation of GST in 2017. He recalled the time when goods-laden trucks had to wait for hours for clearance at state borders. Now, with the help of technological innovations such as e-way bills, this process has become even faster and smoother. "Earlier, there used to be long queues of trucks at state borders. Now, e-way bills are generated in a matter of seconds," he said.
Income Tax Relief And Simplification Of GST
Vaishnav also discussed the income tax relief provided in the 2025-26 budget, and suggested that changes in GST rates and income tax relief will further boost India's economy. "Before 2014, the taxation system was very complex and goods were taxed at multiple levels. GST has simplified it. This adjustment and simplification in GST reforms will make people's lives easier," he said, adding that GST rates on daily use items will now be reduced.
Referring to Prime Minister Modi's promises made on Independence Day, Vaishnav expressed happiness that the government fulfilled its promise. "What Prime Minister Modi promised from the ramparts of the Red Fort has now been fulfilled," he said.
The new GST rate changes, which will come into effect from September 22, and especially on the first day of Navratri, are expected to have a profound impact on the economy.
Increase In India's GDP
The minister estimated the economic impact of these reforms, and said that these changes could add ₹20 lakh crore to India's GDP. "This GST reform will further boost India's economy. From an economic perspective, our GDP is currently ₹3.30 lakh crore, of which ₹2.02 lakh crore is our consumption. If our consumption grows by even 10%, ₹20 lakh crore additional consumption will contribute to the GDP," Vaishnav said, adding that this reform shows the potential of the country to boost consumption and overall economic growth.
The government has touted these GST reforms as a Diwali gift, promising to reduce the tax burden on citizens and boost economic growth. The GST Council has approved rate cuts across various sectors, aimed at reducing costs for both consumers and businesses.
The new generation GST reforms are now finalised and are set to be implemented in the next few weeks. The move is expected to bring about a major transformation in India's economy.
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