Tag: GST rate reduction

India`s GST reforms ignite clash between PM Modi and Congress

Congress Rajya Sabha MP Pramod Tiwari on Monday took a swipe at Prime Minister Narendra Modi over his recent speech on Goods and Services Tax (GST) reforms implementation, suggesting that the PM should have issued an apology to the nation.

Accusing the Narendra Modi-led central government of “looting” poor and middle-class citizens, Tiwari stated that Congress and the opposition had been demanding a single GST slab based on the concept of ‘One Nation, One Tax’.

“The question that needs to be asked is who increased the GST? Who put a burden on the country by increasing it for eight years? You (PM Modi) should have apologised to the nation yesterday. Congress and the Opposition had been demanding only one slab on the basis of ‘one nation, one tax’. However, you looted the poor and middle-class citizens,” Tiwari told ANI.

The Congress MP further criticized PM Modi for referring to the GST rate rationalisation as a “festival,” pointing out that it was the government who had imposed GST at midnight.

“Yesterday, the Prime Minister said that this is a festival. He said that we should celebrate because GST has been reduced. You imposed GST at 12:00 in the night in Parliament. You spoke similarly then. People of this country have paid over Rs 50 lakh crore in GST. The MSMEs have almost shut down,” Tiwari added.

“Now, you (PM Modi) have the courage to ask people to celebrate the ‘Utsav’. Only you could have shown this courage. Your face was telling that your words lacked self-confidence and courage,” he further remarked.

Meanwhile, Union Petroleum and Natural Gas Minister Hardeep Singh Puri commented on the GST reforms, saying they have brought a wave of happiness and celebration among people and could potentially boost the country’s Gross Domestic Product (GDP) by 0.8%.

The new GST reforms came into force from Monday. Puri stated, “Apart from Navratri, the budget utsav has begun. There is a wave of happiness and celebration among people wherever you see. GST rates have been reduced, which will benefit all sections of society. But we are celebrating something else. These reforms can boost the GDP by 0.8%.”

He emphasized that the country’s journey towards a Viksit Bharat (developed India) depends on self-reliance.

“It has been welcomed by all sections of society,” Puri added. He noted that all groups, particularly the lower middle class and economically weaker sections, will benefit as GST rates on various consumption items have been reduced.

From the very first day of Navratri, the nation is taking a significant step forward in the Aatmanirbhar Bharat campaign.

Prime Minister Modi highlighted that the implementation of Next Generation GST reforms marks the beginning of a “GST Bachat Utsav” (Savings Festival) across India. He emphasized that this celebration will enhance savings and make it easier for people to purchase their preferred items.

PM Modi noted that the benefits of this savings festival will reach the poor, middle class, neo middle class, youth, farmers, women, shopkeepers, traders, and entrepreneurs alike.

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https://www.mid-day.com/news/india-news/article/indias-gst-sparks-political-row-as-congress-pramod-tiwari-says-pm-modi-should-have-apologised-23595243

India likely to resolve tariffs issue with US within two months: CEA

Chief Economic Adviser (CEA) V Anantha Nageswaran expressed optimism on Thursday that a resolution to the tariff-related issues with the United States could be reached within the next eight to ten weeks, reported the PTI.

Speaking at an interactive session hosted by the Bharat Chamber of Commerce, Nageswaran said, “Underneath the surface, conversations are going on between the two governments. My hunch is that in the next eight to ten weeks, we will likely see a solution to the tariffs imposed by the US on Indian goods,” according to the PTI.

The United States had imposed an additional 25 per cent tariff on Indian goods from August in response to India’s purchase of Russian oil, bringing the total levy on certain products to 50 per cent. The CEA warned that if these tariffs remain in place, Indian exports to the US could decline.

Describing India as an aspirational lower-middle-income economy, Nageswaran highlighted that the real GDP growth for the first quarter of the current financial year stood at 7.8 per cent. He added that post-pandemic, India has outpaced many other economies in terms of recovery and growth, as per the PTI.

Nageswaran expects the manufacturing, services, and agriculture sectors to play a key role in driving economic progress over the next two years. Consumption and investment, he said, will continue to be the main pillars of growth.

He noted that India has a strong debt-to-GDP ratio, generating more GDP per US dollar of debt compared to many other countries — a sign of efficient capital utilisation. Additionally, rural demand remains resilient, while urban demand is improving.

The recent reduction in GST rates, he said, will result in more disposable income in the hands of consumers, potentially boosting urban consumption, the news agency reported.

The CEA also highlighted that credit to the MSME sector is on the rise, while lending to large industries is undergoing structural change. Resource mobilisation today is well supported by various financial channels.

India’s external sector remains solid despite global headwinds, with robust trade activity and healthy foreign exchange reserves. The current account deficit has eased to just 0.2 per cent of GDP in the first quarter of FY 2025-26.

Regarding the rupee, Nageswaran said, “The rupee is depreciating against the US dollar. But given the underlying strength of the economy, I believe the rupee is likely to stabilise and strengthen in the long term,” as per the PTI.

Outlining the government’s policy priorities, he stressed continued emphasis on capital expenditure, incentives for private investment, and systemic deregulation. Infrastructure development—particularly in ports and airports—has improved, ensuring that economic growth does not lead to overheating, he added.

Touching upon India’s trade with China, he noted that imports are largely composed of capital and intermediate goods. He urged the Indian private sector to increase investment in innovation and research and development (R&D).

On artificial intelligence (AI), Nageswaran remarked that its impact has been limited so far. He cautioned that entry-level coding jobs may be at risk, but overall employment effects are manageable—provided that workers upskill and adapt, the PTI reported.

(With PTI inputs)
https://www.mid-day.com/news/india-news/article/us-tariffs-on-india-india-likely-to-resolve-tariffs-issue-with-us-within-two-months-says-chief-economic-adviser-v-anantha-nageswaran-23594656

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