Nirmala Sitharaman: GST Reforms Boost Citizens’ Spending Power
Tax cuts put more cash in people’s hands.
Union Finance Minister Nirmala Sitharaman announced that the Next Gen GST reforms have injected a staggering Rs 2 lakh crore into India’s economy, empowering citizens with greater purchasing power. Speaking at the Outreach and Interaction Program on Next Gen GST Reforms in Visakhapatnam on Wednesday, she highlighted how the revamped tax structure has simplified rates and reduced financial burdens on consumers.
Sitharaman revealed that 99% of goods previously taxed at 12% have shifted to a 5% GST slab, while 90% of items once under the 28% slab now fall under the 18% bracket. “With only two primary slabs—5% and 18%—these reforms have freed up Rs 2 lakh crore, leaving people with more cash that would have otherwise gone to taxes,” she said. This restructuring aims to stimulate economic activity by increasing disposable income for households and businesses alike.
The minister also underscored the remarkable growth in GST revenues, which soared to Rs 22.08 lakh crore in 2025, up from Rs 7.19 lakh crore when the GST was introduced in 2017. The taxpayer base has also expanded significantly, rising from 65 lakh to 1.51 crore, reflecting greater compliance and a broader tax net. “These numbers demonstrate the success of our reforms in creating a more transparent and efficient tax system,” Sitharaman noted.
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The Next Gen GST reforms, designed to simplify compliance and reduce tax rates, have been hailed as a game-changer for India’s economy. By lowering tax burdens on essential goods and services, the government aims to boost consumption, support small businesses, and drive economic growth. Sitharaman emphasized that the reforms align with the government’s vision of fostering a business-friendly environment while ensuring financial relief for ordinary citizens.
As India continues to recover from global economic challenges, these reforms are expected to play a pivotal role in sustaining growth momentum. Economists predict that the increased liquidity in the hands of consumers will spur demand across sectors, from retail to manufacturing, further strengthening India’s position as a global economic powerhouse.
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