GST reforms have added 'Panchratna' to India's economy, says PM Modi: What are these?

Earlier, on Thursday, PM Modi had remarked that the decision reflected the spirit of cooperative federalism, as both the Centre and states had collectively agreed on the proposals.

Prime Minister Narendra Modi has described the recent Goods and Services Tax (GST) reforms as a “Panchratna” that will give a major push to India’s economy, asserting the measures will benefit every section of society.

Listing the five aspects, PM Modi said the changes will:

>> simplify the tax system
>> enhance citizens’ quality of life
>> give fresh impetus to consumption and growth
>> boost investment and employment through ease of doing business
>> strengthen cooperative federalism

The Prime Minister's vision was shared by the BJP on microblogging site X late Thursday evening.

In a landmark decision just ahead of the festive season, the GST Council on Wednesday unveiled its long-awaited GST 2.0 reforms, streamlining India’s indirect tax system. The new framework reduces the structure to two slabs -- 5 percent and 18 percent -- with a 40 percent rate applicable to luxury and sin goods.

The new regime, set to take effect from September 22, will bring down costs of several goods and services, including daily essentials and health insurance.

Earlier, on Thursday, PM Modi had remarked that the decision reflected the spirit of cooperative federalism, as both the Centre and states had collectively agreed on the proposals.

“The Union Government had prepared a detailed proposal for broad-based GST rate rationalisation and process reforms, aimed at ease of living for the common man and strengthening the economy,” he noted.

According to SBI Research, the reforms could unleash a Rs 1.98 lakh crore boost in consumption in FY26. Factoring in earlier income tax cuts, overall consumer spending may increase by Rs 5.31 lakh crore, or 1.6 percent of GDP.

Sectors such as automobiles, FMCG, retail, and discretionary spending are expected to see the biggest upswing. Moreover, insurance premiums will now be tax-free, while services such as gyms, salons, and yoga centres will become more affordable.

Commerce and Industry Minister Piyush Goyal, speaking to CNN-News18 Thursday evening, also hailed the reforms as a “transformative step not seen in the last 56 years.”

He noted that Prime Minister Narendra Modi’s vision of ease of doing business will accelerate India’s path to becoming the world’s third-largest economy by 2027,

“The fundamentals of the economy are strong. We are powering ahead, not slipping,” Goyal stressed, describing GST reforms as a “labour of love” achieved after months of hard work.

According to him, the tax reduction would impact the pharma and nutraceutical sectors, alongside benefiting farmers, MSMEs, and consumers nationwide.

“The reform in indirect taxes is transformational in nature,” Goyal said, adding that every stakeholder stands to gain. He underlined that the initiative will play a crucial role in India’s journey to becoming a developed country by 2047.