New Delhi, August 15, 2025 –In a show of hope and economic foresight, Prime Minister Narendra Modi revealed a festive surprise from the Red Fort during his Independence Day address: a “Double Diwali” bonanza in the form of comprehensive next-generation GST reforms that will help households, MSMEs, and the economy as a whole.
Next-Gen GST: A Present Before Diwali
With confidence, PM Modi said, “This Diwali, I’m going to make it a double Diwali for you.” This meant that the Goods and Services Tax system would be changed to give people a lot of tax breaks. He talked about efforts made over the past ten years to make taxes easier and said that it was now time for a major overhaul of the GST to make things easier for people.
Simpler slabs and everyday help
The reform plan hints that the current GST slabs of 5%, 12%, 18%, and 28% might be combined. The suggested plan calls for lowering prices on common items. For example, the price of many items could go from 12% to 5%. This move should make things that people need and small and medium-sized businesses (MSMEs) less expensive.
Numbers that show economic momentum
According to financial experts, this change could cost the government around ₹50,000 crore in lost tax revenue, which is about 0.15% of India’s GDP. But a period of higher spending and better compliance could give households a boost of 0.6% to 0.7% of GDP in FY 2025–26. The much-anticipated “GST 2.0” update will focus on making things clearer, making it easier to do business, and helping people from all walks of life.
A bigger plan for the country
In addition to talking about taxes, Modi’s speech included big steps forward in defence and national potential. He showed off the “Sudarshan Chakra” defence system, took strong stands on national security, and pushed for independence through efforts in semiconductors and space missions. Still, the promise of a GST-led holiday bonus that would give people something real to look forward to this holiday season stole the show.
Why it’s important
The news comes at a good time for India’s economy, as the holiday of Diwali approaches (it’s only a few months away in October). When taxes are lowered on things that people use every day, their purchasing power goes up. The suggested changes will make things more affordable for both small businesses and consumers. They will also make it easier to follow the rules, and they will start working again toward a Viksit Bharat.
