Industrialist Anand Mahindra welcomed the sweeping cut in Goods and Services Tax (GST) rates announced on Wednesday and urged policymakers to speed up more reforms to boost India’s economy.
Mahindra called the GST cut a step in the right direction, but stressed that it should trigger a broader reform wave. In a post on X, the Mahindra Group chairman wrote, “Now we join the fight… More and faster reforms are the surest way to boost consumption and investment. These reforms will expand the economy and make India’s voice heard in the world.”
He also urged more reforms, citing Swami Vivekananda’s call. “But let us remember Swami Vivekananda’s famous call: ‘Arise, awake and stop not till the goal is reached.’ So, please reform more…”, he wrote.
His remarks came after Finance Minister Nirmala Sitharaman unveiled a simplified GST structure with two tiers, 5% and 18%, replacing the earlier four-slab system.
Items of daily use such as soaps, shampoos, toothpastes, kitchen utensils, bicycles and household goods will now come under the 5% tax bracket, while essentials such as UHT milk, cheese and Indian breads have been made zero-rated. These changes will come into effect from September 22, which coincides with Navratri.
Industry leaders say the move will boost demand ahead of the festive season. “This is a big change. Barring perishable items, almost all food items are in the 5% tax slab,” said Mayank Shah, vice-president of Parle Products. Dabur CEO Mohit Malhotra said the reform will act as a “powerful catalyst” for rural and semi-urban demand.
According to Revenue Secretary Arvind Srivastava, the rationalisation is estimated to cost the Centre and states Rs 48,000 crore, which is financially sustainable. He stressed that the rate cut is expected to improve compliance and generate enthusiasm.
With exemptions on food items and life-saving drugs as well as cuts on medicines, household goods and consumer goods, this sweeping change in GST has been described by experts as “GST 2.0”.
Mahesh Jaising of Deloitte India said the reform will “provide much-needed relief to families” and curb disputes over tax classification.