New Delhi- The government’s sustained reform push over the past few years, including the removal of more than 40,000 unnecessary compliances and the repeal of over 1,500 obsolete laws, has laid the foundation for a modern, efficient and citizen-centric economic ecosystem. Among these measures, the GST rate rationalisation implemented from September 22 this year has emerged as a major “big bang” reform aligned with the vision of building a ‘Viksit Bharat’.
Addressing the nation on the 79th Independence Day, Prime Minister Narendra Modi had announced the rollout of next-generation GST reforms by Diwali, aimed at easing the tax burden on everyday items and directly benefiting the common citizen. He said the reforms would act as a stimulus for economic activity by improving affordability and encouraging consumption.
According to the Finance Ministry, the implementation of GST 2.0 has already begun to show positive results, with stronger consumption trends, improved consumer sentiment and higher sales across key sectors, including automobiles.
The passenger vehicle segment recorded robust year-on-year growth in both wholesale and retail volumes in November, supported by sustained post-festive demand, GST rate cuts and the winter wedding season. An ICRA report noted that retail sales rose 22 per cent year-on-year in November, while wholesale volumes increased 19 per cent to 4.1 lakh units as manufacturers maintained production levels to meet demand.
The rationalisation of GST rates has also translated into higher revenues for states. Gross SGST and IGST settlements to states grew by 5 per cent during September–November of the current financial year compared to the same period last year.
In a written reply during the recently concluded Winter Session of Parliament, Minister of State for Finance Pankaj Chaudhary informed the Rajya Sabha that GST collections for September–November 2025-26 rose to Rs 2,59,202 crore, up from Rs 2,46,197 crore during the corresponding period of 2024-25.
The government said the recent GST reforms, combined with its continued focus on ease of doing business, form part of a broader strategy to revive and sustain consumption-led growth. A strengthening of consumer demand is expected to further support GST revenue growth.
Improved affordability following rate rationalisation has also boosted the retail credit market. The Credit Market Indicator (CMI) rose to 99 in the second quarter of FY25 from 98 in the previous quarter, reflecting increased retail loan demand and renewed consumer confidence, according to a TransUnion CIBIL report.
High-frequency indicators further suggest that economic activity has gained momentum after the GST reforms. E-way bill generation grew by 14.4 per cent year-on-year during September and October 2025, while cumulative GST collections for April–October 2025 recorded a 9 per cent increase, pointing to resilient revenue streams supported by firm consumption and better compliance.
Finance Minister Nirmala Sitharaman has said that following income tax and GST reforms, the government’s next priority will be the simplification of the customs duty structure, as part of ongoing efforts to strengthen India’s economic framework.
With inputs from IANS