GST Reforms Will Pump ₹2 Lakh Crore Into The Economy, Boosting Demand Across Sectors: Union Finance Minister Sitharaman

Kolkata: Union Finance Minister Nirmala Sitharaman on Thursday announced that the latest round of Goods and Services Tax (GST) reforms will inject around Rs 2 lakh crore into the economy, significantly boosting demand across various sectors.

Sitharaman described the “new generation GST reforms” as measures designed to cut tax rates, ease compliance, and eliminate ambiguities. These changes are expected to benefit the poor, middle class, farmers, MSMEs, and several industries in West Bengal.

“The (GST) Council’s decision to reduce rates was possible only because states came together in the spirit of cooperation. There is no donor-donee model in GST. If revenues fall, the Centre bears it equally, and after devolution, our share is even smaller,” she said during an event in Kolkata.

The reforms will directly benefit key sectors in Bengal such as handicrafts, garments, tea, jute, and agro-products, thereby aiding festive season sales, the Finance Minister added.

Products including ‘Nakshi Kantha’, Malda mangoes, Darjeeling tea, hosiery, and jute bags will see lower tax rates. The new GST slabs, mainly set at 5% and 18%, will take effect from September 22, coinciding with the first day of ‘Navratri’. Sitharaman explained that this timing was deliberately chosen to align with the Durga Puja festivities.

“Durga Puja is Bengal’s biggest festival. People make major purchases during this period. The timing ensures they benefit from the reduced tax burden,” she said.

Elaborating on the reform trajectory, Sitharaman noted that India has moved from four GST slabs to largely two but added, “We are not yet ready for a single rate. Maybe sometime in the future.”

She also highlighted efforts to curb past revenue leakages caused by misclassification and loopholes — citing examples such as differential tax treatment on various popcorn types — which have now been plugged.

Calling GST “one of India’s biggest reforms,” the Finance Minister expressed confidence that these changes would spur economic growth, especially benefiting Bengal’s small-scale and craft-based industries, while boosting consumption nationwide.

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