Finance Minister Nirmala Sitharaman revealed that the GST 2.0 reforms were developed over more than 18 months. She emphasized that these changes were not a reaction to recent US tariff hikes. The planning was thorough and deliberate, reflecting long-term strategic thinking. This timeline shows careful preparation behind the scenes.
Sitharaman shared these details at the NDTV Profit conclave in New Delhi. She noted that Prime Minister Modi reminded her about the GST reforms during the Union Budget announcements. This highlights the government’s consistent focus on tax system improvements. The Prime Minister’s involvement underscores the importance of these updates.
The Finance Minister clarified that the reforms were not crisis-driven. External factors like US tariffs did not force the government’s hand. Instead, the changes stem from a dedicated evaluation process. This proactive approach aims to strengthen the economy independently.
By May, Sitharaman realized they had a substantial package ready. She felt confident presenting the GST 2.0 plan to the Prime Minister. This package includes significant revisions to the existing tax structure. Its development involved extensive research and collaboration.
State finance ministers unanimously supported the tax rate cuts. There was broad agreement during the GST Council meeting. This consensus is crucial for implementing nationwide changes. Cooperation between central and state governments facilitates smoother transitions.
Sitharaman acknowledged that states expressed concerns about revenue impacts. These concerns were raised multiple times during discussions. However, she noted that there was no acrimony in these conversations. The dialogue remained constructive and focused on solutions.
Compensation to states for tax shortfalls ended in June 2022. The Centre is no longer providing these payments. This change marks a new phase in fiscal relations. States must now adapt to this updated framework.
The compensation cess collected currently services COVID-19 pandemic loans. These funds are not available for other purposes. This allocation helps manage the economic aftermath of the health crisis. Repaying these loans is a priority for the government.
Improved collection efficiency boosts overall tax revenues. Sitharaman dismissed notions that the Centre holds vast unused funds. Every rupee collected is allocated purposefully. This efficiency benefits the entire economy.
The GST 2.0 reforms will benefit 140 crore Indians. Farmers and MSMEs are set to gain significantly. These groups drive economic growth and create employment opportunities. Supporting them strengthens national prosperity.
Stock markets reacted moderately to the GST 2.0 announcements. Sitharaman attributed this to global uncertainties influencing investor sentiment. Many external factors affect market performance daily. She remains focused on citizen impact rather than market fluctuations.
The Finance Minister prioritizes public benefit over stock market responses. She wants reforms to resonate with everyday Indians. Their approval matters more than temporary market movements. This people-first approach guides policy decisions.
GST 2.0 represents a major step forward in tax administration. Its careful planning ensures broad-based advantages. The government remains committed to inclusive economic progress. These efforts aim to enhance ease of living for all citizens.