GST 2.0 Pumps ₹2 Trillion Into Economy, Most Items Shifted From 28% to 18% Slab: Sitharaman
Finance Minister Sitharaman says 90% of goods under 28% slab moved to 18% bracket citizens to benefit with more cash in hand
New Delhi : The Goods and Services Tax (GST) 2.0 reforms have pumped at least ₹2 trillion into the Indian economy, providing citizens with greater purchasing power, Union Finance Minister Nirmala Sitharaman announced on Wednesday.
Speaking at the Outreach and Interaction Programme on next-gen GST reforms in Visakhapatnam, Sitharaman called the rejig a “big step for the Indian economy,” highlighting that the new tax structure simplifies slabs and reduces rates for essential goods.
According to the Finance Minister, 90% of items previously under the 28% slab have been moved to the 18% bracket, while 99% of goods under the 12% slab are now taxed at 5%. Bread, milk, and paneer remain tax-free.
“With this streamlined regime of just two slabs—5% for essentials and 18% for other goods—₹2 lakh crore will be injected into the economy. People will have more cash in hand,” Sitharaman said.
She also pointed out that several FMCG companies have voluntarily announced price cuts to pass on the benefits to consumers, even before the new regime takes effect on September 22.
Sitharaman noted that GST collections have surged from ₹7.19 lakh crore in 2018 to ₹22.08 lakh crore in 2025, while the taxpayer base has expanded to 1.51 crore from 65 lakh.
The government said the rate restructuring was guided by five priorities: relief for the poor and middle class, support for farmers, benefits for MSMEs, encouragement of employment, and promotion of exports.
