PM Modi Launches “Next-Gen GST”, Announces Major Tax Reliefs in National Address

 PM Modi Launches “Next-Gen GST”, Announces Major Tax Reliefs in National Address

PM Modi Launches “Next-Gen GST”, Announces Major Tax Reliefs in National Address

New Delhi — September 21, 2025:

Prime Minister Narendra Modi this evening delivered a landmark address to the nation announcing sweeping tax reforms set to take effect from September 22, ushering in what he called a “GST Bachat Utsav” (Savings Festival). The changes are expected to generate ₹2.5 lakh crore in annual savings for citizens, especially benefiting low-income, neo-middle, and middle-class households.

Key Announcements

Overhaul of GST Rate Structure

The Prime Minister introduced a simplified GST system with primarily two slabs: 5% and 18%. A higher 40% “de-merit” rate will remain for super luxury, sin, and demerit goods. This reform seeks to reduce the burden on daily goods and services, making them more affordable for consumers.

Cheaper Essentials

Under the new GST regime, items like medicines, insurance, and everyday essentials will see significant tax relief. Prices of many common household products are expected to fall under the 5% slab.

Income Tax Exemption Raised

The tax-free threshold for annual income has been raised to ₹12 lakh, offering significant relief to the middle class.

“Double Bonanza” for the Poor and Middle Class

Modi emphasized that the combined effect of GST cuts and increased income tax exemption will amount to a double benefit for the poor, “neo-middle class,” and middle class.

Atmanirbhar Bharat & Swadeshi Push

Alongside fiscal measures, the Prime Minister reiterated the call for self-reliance (Atmanirbhar Bharat), urging citizens to buy products made in India. He appealed to MSMEs (Micro, Small & Medium Enterprises) to raise quality and compete globally. “Garv se kaho, ye Swadeshi hai” (“Say with pride, this is Swadeshi”), was one of the slogans highlighted.

Implications & Reactions

The reforms are expected to reduce inflationary pressures particularly for essential goods — medicines, insurance, daily household items — giving relief to consumers across India.

MSMEs are seen as major beneficiaries, as they will face fewer compliance burdens and will gain from lowered tax rates for many inputs and final goods.

Industry analysts believe this could boost consumption, especially just in time for the festival season, giving a stimulus to markets and manufacturing sectors.

State governments have been encouraged to proactively support local manufacturing and ensure that quality standards are met to better compete globally.