PM Modi Address: GST 2.0, “GST Bachat Utsav,” and a Promise of Savings

On September 21, 2025, PM Modi address the nation from New Delhi to unveil the final contours of the much-anticipated Goods & Services Tax (GST) reforms, set to kick in from September 22. Framed as a “next generation GST” overhaul, the address was aimed at simplifying taxation, reducing the cost of essentials, boosting domestic manufacturing, and broadly easing the tax burden on the poor, middle classes, and MSMEs (Micro, Small & Medium Enterprises).

Modi called the period ahead “GST Bachat Utsav” (festival of savings), urging all Indians to seize the benefits of the newly reduced GST rates. According to his statements, the combined impact of these reforms—with GST rate cuts plus changes in income tax exemption thresholds—will result in estimated savings of ₹2.5 lakh crore for the populace.

Key Highlights from the PM Modi Address

Simplified Tax Structure & Relief for Common Goods

The PM emphasized that under the revised GST, most everyday items like soap, toothpaste, basic foods, and school supplies will either move to a zero tax slab or to the 5% rate, making essential goods significantly cheaper. Goods previously taxed at 12%, for example, will now largely fall under 5%. This is expected to ease the cost of living for millions of households.

Income Tax Relief

Modi also announced increases in the income tax exemption limit, giving the middle class additional breathing space. While specific numbers were part of the broader fiscal disclosures, the intent is clear: more take-home income and allowances for savings and discretionary spending.

Focus on MSMEs & Domestic Manufacturing

A central theme of the speech was the need to revive domestic production and manufacturing through the “Swadeshi” or Made-in-India route. Modi urged small businesses and manufacturing units to seize opportunities created by the GST reform and contribute to India’s self-reliance (Atmanirbhar Bharat). State governments were also called upon to support this effort, create investment-friendly environments, and facilitate production beyond major metro centers.

The “One Nation, One Tax” Dream

Modi reflected upon the origin of GST in 2017 and how multiple overlapping taxes—state taxes, entry taxes, octroi, VAT, service tax—had created layers of friction in trade, pricing, and logistics. He said the reforms aim to deepen that initial goal: simplify the tax burden further so goods move across states more easily, costs drop, and compliance becomes less cumbersome for businesses and consumers alike.

Saving for Citizens & Celebrations

To mark the reforms, the government is launching “GST Bachat Utsav” starting with Navratri, associating the festival mood with savings and benefits. Modi framed this as a gift to all citizens, especially lower income, neo-middle class, and middle class sections, who will see direct financial relief from reduced GST rates. He also highlighted that families will see cheaper prices, youth will benefit from increased opportunities, and the overall economy is expected to gain momentum.

The Push for Swadeshi and Self-Reliance

Repeatedly, Modi called for citizens to prefer locally made goods—not just for economic reasons but as a patriotic act. He held up “Swadeshi” products as something people should take pride in, suggesting even simple choices—like buying an Indian comb or locally made tools—matter for the larger goal of building India’s manufacturing strength and reducing dependence on imports.

What It Means for Citizens & Businesses

For Consumers

From September 22 onward, shoppers can expect meaningful reductions in the price of everyday items. Necessities like personal care, dairy products, staples, and common household items will drop in price thanks to reduced GST rates. Over time, this should ease inflation pressures, particularly on lower and middle income families where food and daily needs take up a larger share of expenditure.

For Businesses, Especially MSMEs

Small businesses are expected to benefit in several ways: lower tax rates will reduce their input costs (especially for items in the mid to low slabs), compliance layers have been simplified, and reduced tax burden will help with pricing flexibility. However, businesses must also ensure they fully pass on these benefits to consumers—Modi’s address strongly urged corporates, manufacturers, and retailers not to hold back price reductions.

Budgetary & Fiscal Implications

While the focus was on relief, these reforms also come with challenges: the government will need to balance revenue loss from lower tax rates with broader fiscal stability. Ensuring that the drop in GST rates doesn’t lead to unintended revenue shortfalls will require close monitoring. Regulatory oversight may become more stringent to ensure that companies truly reflect the price cuts.

Political Symbolism

The timing—with reforms taking effect at the start of Navratri, a major festival season—adds political resonance. Framing tax cuts as gifts, savings festivals, and associating them with Swadeshi and national self-reliance imbues economic policy with cultural and symbolic energy. It sends a clear message about prioritizing domestic production and national identity.

Challenges & What to Watch

• How fully and quickly companies pass on price reductions to consumers. There is always risk that businesses keep margins and don’t reflect the relief in final sale prices.
• Whether state governments align with the central government in implementing the simplified GST rates and help with logistics, distribution, and enforcement.
• Monitoring price stability to ensure that once the tax change occurs, inflation does not offset the benefit.
• Assessing whether revenue shortfalls for government are manageable, and whether fiscal discipline is maintained.

Conclusion

PM Modi’s address ahead of the GST 2.0 rollout marks one of the largest consumer relief measures in recent years—a mix of tax cuts, simplified slabs, and incentives tied to domestic production. For many Indians, this represents not just financial savings but a broader promise: simpler taxes, cheaper essentials, and a nudge toward buying local.

If the words today are matched by action tomorrow—transparent implementation, honest pricing and effective governance—these reforms could become a turning point in how taxation, consumption, and manufacturing align in India’s growth story.