GST 2.0 launched: PM Modi unveils ‘Bachat Utsav’ to boost savings and economic growth

On the eve of Navratri, Prime Minister Narendra Modi addressed the nation to announce the launch of GST 2.0, a major overhaul of India’s Goods and Services Tax regime. The Prime Minister described the initiative as the start of a “Bachat Utsav” – a festival of savings – aimed at easing the financial burden on households while enhancing India’s appeal to investors and entrepreneurs.

“From tomorrow, the nation will celebrate GST Bachat Utsav. Your savings will increase, and you will be able to buy your favourite things. This reform will benefit every section of society,” PM Modi said in his address.

At the core of the reforms is a simplified two-tier GST structure, approved by the GST Council earlier this month. The new system imposes tax rates of 5 per cent and 18 per cent, effective September 22, coinciding with the first day of Navratri. Nearly 99 per cent of goods previously taxed at 12 per cent will now fall under the 5 per cent bracket, while around 90 per cent of items previously in the 28 per cent slab will move to 18 per cent. However, a 40 per cent compensation cess will continue to apply to luxury and sin goods.

PM Modi highlighted the combined efforts of the Centre and states in unifying India under the principle of “one nation, one tax,” thereby eliminating the complexity of multiple levies that once inflated costs and strained household budgets.

“Before 2014, millions of businesses and citizens faced daily challenges due to the maze of various taxes. The increased costs in transporting goods were borne by the poor, and consumers were charged higher prices. It was essential to free the country from this situation,” he said.

The Prime Minister described GST 2.0 as a “double bonanza” for citizens, simultaneously making essentials more affordable and increasing household savings. He linked the tax reforms with the Union Budget’s earlier decision to make income up to ₹12 lakh tax-free, a move designed to ease the burden on India’s growing middle class.

“When income tax relief up to ₹12 lakh is granted, the lives of the middle class undergo a profound transformation. Now, the poor, neo-middle class, and middle class are receiving a double bonanza. With the reduction in GST, citizens will find it easier to fulfil their dreams,” he stated.

Reflecting on India’s progress, PM Modi said that in the past eleven years, 25 crore Indians have risen out of poverty, forming a dynamic neo-middle class with aspirations of its own. Together, the GST reforms and income tax relief are projected to save over ₹2.5 lakh crore in a single year.

Underlining a citizen-centric approach, he said, “We are moving forward by following the mantra of Nagrik Devo Bhava, and its reflection can be seen in the next generation’s GST reforms.”

The Prime Minister emphasized that by dismantling the complex tax structure, GST 2.0 would make doing business easier, attract greater investment, and create a fairer marketplace across all states. “These reforms will accelerate India’s growth story, simplify business, and ensure that every state becomes an equal partner in the journey of development,” he concluded, framing the tax overhaul as both an economic necessity and a unifying national milestone.