Prime Minister Narendra Modi on Sunday announced the rollout of what he called a “Bachat Utsav” – a festival of savings – as the country ushers in a simplified Goods and Services Tax (GST) structure from September 22, coinciding with the first day of Navratri.
Addressing the nation on the eve of the festival, Modi described the reform as the dawn of a new economic chapter that would ease the burden of households while boosting India’s appeal as a hub for investment and entrepreneurship.
“From tomorrow, the nation will celebrate GST Bachat Utsav. Your savings will increase, and you will be able to buy your favourite things. This reform will benefit every section of society,” Modi said.
At the heart of the reform is a sweeping simplification of the tax regime. Earlier this month, the GST Council approved a streamlined two-tier structure of 5 per cent and 18 per cent.
Nearly 99 per cent of goods once taxed at 12 per cent will now fall under the 5 per cent bracket, while about 90 per cent of items previously taxed at 28 per cent will move to 18 per cent. A 40 per cent compensation cess will remain on luxury and sin goods.
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The Prime Minister credited the combined efforts of the Centre and states for freeing the country from the burden of multiple levies and making “one nation, one tax” a reality.
He recalled how, before 2014, businesses and consumers alike were trapped in a maze of cascading taxes that inflated costs and strained household budgets.
“At that time, millions of companies and citizens faced daily problems due to the maze of various taxes. The increased expenses incurred in transporting goods from one city to another were borne by the poor, and customers like you were charged. It was essential to free the country from this situation,” he said.
Modi described the new GST framework as a “double bonanza,” saying it would not only make essentials cheaper but also put more money into people’s hands. He linked the reform to the Union Budget decision earlier this year that exempted income up to Rs 12 lakh from tax, aimed at easing the burden on the middle class.
“When income tax relief up to Rs 12 lakh is granted, the lives of the middle class undergo a profound transformation, bringing about so much simplicity and convenience. Now, the poor, the neo-middle class, and the middle class are receiving a double bonanza. With the reduction in GST, it will be easier for citizens to fulfil their dreams,” he said.
The Prime Minister pointed out that in the last eleven years, 25 crore Indians had emerged from poverty, forming what he described as a dynamic neo-middle class with growing aspirations. He said the twin measures – income tax relief and GST reforms – would together save people more than Rs 2.5 lakh crore in a single year.
“We are moving forward by following the mantra of Nagrik Devo Bhava, and we can see its reflection in the next generation’s GST reforms,” Modi said, underscoring the citizen-first philosophy behind the government’s economic agenda.
By dismantling the cluttered tax structure, Modi asserted, GST 2.0 would simplify doing business, attract greater investment, and create a fairer marketplace.
“These reforms will accelerate India’s growth story, simplify business, and ensure that every state becomes an equal partner in the journey of development,” he said, casting the overhaul as both an economic necessity and a unifying national milestone.
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