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GST Bachat Utsav: A Savings Festival Kicks Off
On September 22, 2025, India ushers in a new chapter in its indirect taxation system — the rollout of “Next-Generation GST”, popularly termed GST 2.0. Prime Minister Narendra Modi, in a nationwide address on September 21, announced the launch of “GST Bachat Utsav” (Savings Festival), aligning the tax reforms with the beginning of Navratri, adding symbolic resonance to the changes.
This festival is more than just symbolic. It reflects a dual initiative: tax reform and income tax relief, intended to bring direct, visible benefit across broad sections of society. Together, the measures are expected to yield a savings of over Rs 2.5 lakh crore for Indian citizens — a large sum aimed at easing the cost of living, promoting consumption, and strengthening the economy.
What Changes with GST 2.0
Under GST 2.0, the GST Council has reduced the tax slabs significantly. Most everyday goods and services will now be taxed at 5% or 18%, replacing many previous slabs. For example:
- Goods previously taxed at 12% will largely now be shifted to the 5% slab.
- Similarly, items under the 28% slab are being moved down to 18%, except luxury and “sin” goods, which will also incur a high demerit rate or cess.
Prime Minister Modi emphasized that with income up to Rs 12 lakh per annum being made tax-free earlier this year, the new GST changes form a “double bonanza” for the poor, the “neo-middle class,” and the wider middle class.
Who Will Benefit
According to the Prime Minister’s address, the reforms under GST Bachat Utsav will benefit:
- The poor and middle class, especially the neo-middle class whose incomes hover around the earlier thresholds.
- Youth, women, farmers, traders, shopkeepers, and entrepreneurs, including MSMEs, with the expectation that these groups will both pay less tax and find doing business easier.
Modi pointed out that in the last 11 years, approximately 25 crore people have moved out of poverty, forming what is called the neo-middle class — a group with rising aspirations. The tax reliefs, seen in tandem with the GST rate cuts, are intended to boost their purchasing power, simplify life, and make essential goods more affordable.
Impacts & Broader Goals
These reforms are not just about reducing tax burden. They’re part of a broader economic vision:
- Ease of doing business: Simplifying tax slabs reduces compliance burden, reduces paperwork, and removes many of the complexities that were earlier associated with transporting goods across states, varying rate structures, etc.
- Boost to domestic manufacturing (Swadeshi / Atmanirbhar Bharat): The Prime Minister made a strong push for citizens to prefer made-in-India products, evoking the Swadeshi movement as a source of national pride. The idea is that reduced GST rates, simpler regulations, and incentives for MSMEs will lead to more production locally.
- Uniform development and inclusive growth: Modi stressed that every state will become an equal partner in India’s development. The reforms are portrayed not as benefits for some but for all: from remote areas to big cities, from consumers to small manufacturers.
Challenges and Considerations
While the tax reforms have been widely welcomed, certain points merit careful attention:
- Passing on the benefits: It’s essential that reductions in GST rates actually translate to lower consumer prices. Sometimes businesses are slow to adjust prices, or fail to reflect tax cuts fully. Vigilance will be required.
- Implementation logistics: Major tax reforms across goods, services, accounting, databases, and verification systems require precise coordination between central and state governments. Any delay or mismatch could lead to confusion, especially during a busy season with high consumer demand.
- Revenue trade-offs: While the government projects large savings for consumers, some revenue loss for the treasury is inevitable. Managing that balance — maintaining government expenditure, social schemes, fiscal deficit targets — will be crucial.
- Public awareness and behaviour: To ensure broad uptake, people need to understand what’s changing, which goods are cheaper, what is Swadeshi, etc. For example, many may not know whether a product is Indian-made or not, so identification, transparency, labelling, and awareness campaigns will help. PM Modi’s address made clear that these are part of the plan.
Conclusion
GST Bachat Utsav represents a landmark moment in India’s taxation history. By simplifying GST slabs, offering income tax relief, and emphasizing self-reliance via Swadeshi goods, the government is seeking to deliver immediate relief to consumers while also aiming for longer-term shifts in the economy.
If executed well, the combined effect of these reforms could be substantial: cheaper daily essentials, increased purchasing power, higher consumption, and a stronger push towards domestic manufacturing. However, success will depend on implementation — making sure the benefits reach ordinary citizens, that tax cuts are reflected in prices, and that all states and businesses are aligned in the change.
As Indians begin the Navratri festival with this savings festival, the hope is that the season becomes a turning point: not only in spiritual terms but in economic ones — a boost for households, for businesses, and for the country’s push toward self-reliance.
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