NEW DELHI, Sept 22: Prime Minister Narendra Modi on Monday wrote an open letter to the citizens and said the country must celebrate the “GST Bachat Utsav” during the festival season.
He said lower GST rates would bring more savings to every household and ensure greater ease of doing business. In the letter on the first day of Navratri, Mr Modi said the GST reforms have brought a positive change across the country.
The Prime Minister said the restructured GST regime will boost savings and directly benefit all sections of the society, including farmers, traders, and Micro, Small & Medium enterprises (MSMEs). He said the latest GST norms will encourage higher growth and more investments, accelerating the progress of every State and region.
Noting that essential items such as dry fruits, medicines, soap, toothpaste, insurance, and many more items will now either be tax-free or fall in the lowest 5% tax slab, Mr Modi said, “In the last few years, 25 crore people have risen above poverty and formed an aspirational neo-middle class. Further, we have also strengthened the hands of our middle class with the massive income tax cuts, which ensure zero tax up to the annual income of ₹12 lakh. If we combine the income tax cuts and the next generation GST reforms, they add up to savings of nearly ₹2.5 lakh crore for the people,” he said.
The Prime Minister recalled the implementation of GST in 2017 and said the “nation’s GST journey… was a turning point in freeing our citizens and businesses from the web of multiple taxes.” “GST united the entire nation economically. ‘One Nation One Tax’ brought uniformity and relief. The GST Council, with the active participation of both Centre and States, took many important pro-people decisions,” he said.
Mr Modi said the new reforms simplify the system, and small business, shopkeepers, traders, manufacturers, and MSMEs will experience greater “ease of doing business” and “ease of compliance.” Lower taxes, lower prices and simpler rules will mean better sales, less compliance burden and growth of opportunities, he added.
Earlier, at a press conference, Union Minister Ashwini Vaishnaw highlighted the reduced prices of household goods and other essential items due to the GST cuts, pointing out that the previous Congress-led regimes had levied steep taxes. Stating that GST benefits are shared across all States, he said the reforms reflected the Prime Minister’s emphasis on cooperative federalism.
Mr Vaishnaw said the reforms will lead to an estimated increase of ₹20 lakh crore in the country’s GDP, which is currently about ₹330 lakh crore. It will directly impact investments, giving a boost to manufacturing and job creation, due to an increase in demand.
Meanwhile, the West Bengal chief minister Mamata Banerjee said the revised rate cuts would cost her government exchequer over Rs 20,000 crores. Observing that the Union government should not take any credit for the Goods and Services Tax (GST) rate cuts, she said, “You people must be aware that the Central government is not spending even one paisa for it (the GST rate cut). All the money is going from the State government exchequer. One person is taking credit for it. Will he give us money?” the Chief Minister said.
Her government was preparing an advertisement on the issue which would be published soon, Ms Banerjee said, speaking to media persons while inaugurating a Durga Puja pandal in the city. “I am happy that this (the GST rate cuts) have occurred and people will benefit. But this (the rate cut) has been done by us because the people of West Bengal will suffer a revenue loss of ₹20,000 crore from the State exchequer,” Ms Banerjee said.
She had been the first to write to the Prime Minister Narendra Modi on reducing the GST rates for health insurance, the Chief Minister said. While the Union government would devise ways to pay States ruled by the BJP, it was States like West Bengal that would suffer, she added. While Ms Banerjee did not name the Prime Minister, her remarks appeared to be directed at him.
She said the Union government had not released over ₹1.92 lakh crore as Central project allocations for several schemes, including the Mahatma Gandhi National Rural Employment Guarantee Scheme. “You are taking away our money, causing difficulties for us to run State-sponsored welfare projects like Lakshmir Bhandar and Krishak Bandhu. We will continue to run our social welfare schemes nevertheless,” Ms Banerjee said.
The West Bengal government funds several cash incentive schemes, including Lakshmir Bhandar and Krishak Bandhu, which are a huge burden on the State exchequer. The loss of ₹20,000 crore to the State exchequer would place a further strain on the State government’s spending, experts said.
The development comes months before the 2026 Assembly election in the State, when the Trinamool Congress government may have plans to announce new schemes to woo the electorate.
(Manas Dasgupta)