GST Reforms: A Step Towards Viksit Bharat, Boosting Economic Growth

The 56th meeting of the Goods and Services Tax (GST) Council has approved the reforms that were announced by Prime Minister Shri Narendra Modi on 15th August 2025. These reforms are being considered landmark as they focus on providing major relief to the common man of India by reducing the tax burden on essential goods and services, simplifying compliance for businesses, and promoting overall economic growth.

The recent GST reforms in India are expected to have a significant impact on the finance and banking sector. By simplifying tax structures and reducing rates, the reforms will stimulate economic growth, increase affordability, and improve compliance.

Positive Impact - Boost to Economic Growth : The GST reforms aim to stimulate economic growth by reducing tax burdens on citizens and businesses, thereby increasing consumption and investment. - Increased Affordability : With a simplified two-rate system of 5% and 18%, essential goods and services will become more affordable, benefiting low- and middle-income households.

The GST reforms will lower inflation, elevate growth, enhance consumer sentiment, and streamline business operations without derailing fiscal consolidation paths. This, in turn, will lead to increased credit growth, improved asset quality, and stability in the financial system. The banking sector will benefit from cheaper and steadier credit for households, MSMEs, and infrastructure, ultimately driving economic growth and development.

Overall, the GST reforms will contribute to a more robust and efficient financial system in India. These changes are essential steps towards achieving the vision of Viksit Bharat, a developed and prosperous India.