As GST 2.0 rolls out, Modi hails ₹2.5L-cr ‘savings festival’

INdians testament bring through ₹2.5 lakh crore on calculate of the GST value changes efficacious from Monday and income tax changes announced earlier this year, Prime Minister Narendra Modi said in an address to the nation Sunday evening.Terming it a “savings festival” he pointed out that while the income tax changes benefited the middle class, the GST cuts also benefit the poor and the neo middle class.“People will now be able to save more and buy what they like. With these reforms the youth, farmers, women, shopkeepers, traders, entrepreneurs will all be able to benefit from this Bachat Utsav (savings festival). Everyone will have something to feel happy about in this festive season,” Modi said.The PM also referred to low inflation—retail inflation is around 2%—in a speech with a clear message between the lines ahead of the festive season that sees Indians spending more on everything from consumables to clothes to electronic goods to house painting: spend more.India is hoping that the demand surge will offset some of the impact of US tariffs that have hit Indian merchandise exports.The PM also spoke about the salutary effect of a lighter GST regime on medium and small enterprises—enhancing their competitiveness and boosting an economy that is still dominated by small businesses.“Reduction in the GST slabs will allow the MSMEs and small traders to make profits. Their sales will go up and they will have to pay less tax. It will be a double bonanza for them as well,” he said, adding that he had “a lot of expectations” from the sector.Modi urged MSME entrepreneurs to enhance quality standards to global levels. “Whatever we make, they must soar past all tests—they should elevate India’s pride,” he said, emphasising that production quality should have “global recognition and pride.”The PM’s metaphorical call to arms for both consumers and businesses came at the end of a weekend that saw the US make changes to the H-1B regime, effectively killing a pipeline that made it possible for highly skilled Indian technology workers (the main beneficiaries of H-1B visas) to make lives and careers in the US.Expectedly, self-reliance was another area he focused on.“The mantra of swadeshi had given strength to swatantrata (independence); the same mantra will give strength to samridhi (prosperity),” Modi declared, calling for a renewed push towards Indian-made goods.“The country will make progress only when Indians buy Indian-made goods with pride,” he emphasised, expressing concern about the prevalence of foreign goods in daily life. “Too many items have entered our daily life knowingly or unknowingly. We don’t even know whether the comb that we use is Indian-made or made abroad. We need to get rid of them.”The reforms represent the most significant overhaul of India’s consumption tax since GST’s 2017 launch, streamlining the structure from four slabs to essentially two rates of 5% and 18%.“Under the new GST regime, 99% of the goods that earlier attracted 12% GST have now been shifted to 5%,” Modi explained, describing how everyday items including medicines, household essentials and appliances would become significantly cheaper.The lower GST rates are expected to turbocharge consumption across sectors strategically important to India’s growth story. Cheaper automobiles could unlock first-time buyers while encouraging upgrades, stimulating manufacturing, components and financing ecosystems employing millions. Reduced appliance and household essential costs coincide with peak festive demand, driving a surge through FMCG networks, retail chains and e-commerce platforms. Tax-free insurance expands financial inclusion to previously underserved segments, while cheaper food staples boost discretionary spending precisely when it typically peaks.The Prime Minister highlighted the emergence of a “neo middle class,” noting that 2.5 million people had “beaten poverty” over the past 11 years. “These people are now playing a critical role in the country. This new middle class has aspirations and dreams,” he said.Reflecting on the journey since 2014, Modi painted a stark picture of the previous tax regime where businesses found it easier to send goods from Bangalore to Hyderabad via Europe due to multiple state taxes and regulations.“In 2017, when India took steps towards GST reforms, we changed old history and scripted new history. People had to deal with multiple taxes and people had to fill multiple forms. There were so many problems everywhere,” he said.The Prime Minister emphasised that the reforms embodied “nagarik devo bhava” (citizen is god) and would accelerate the country’s growth story whilst making business easier and investment more attractive.“These reforms will make it easier for people to fulfil dreams, such as making a house, buying a television or refrigerator or a vehicle,” Modi said, noting the enthusiasm among shopkeepers for the changes.The address comes as India’s most comprehensive tax restructuring takes effect from Monday, coinciding with the start of Navratri festivities and the crucial festive shopping season.