Sitharaman: GST Reforms to Put More Cash in Common Man’s Hands

New Delhi: Union Finance Minister Nirmala Sitharaman on Wednesday said that the next-gen GST reforms would bring Rs 2 lakh crore into the economy, leaving the common man with more cash on hand, which otherwise would have gone to taxes. “The GST Council’s decision, however, aims to reduce the tax burden on consumers and improve liquidity in the economy,” she said, while addressing the outreach and interaction programme in Visakhapatnam.

The finance minister also said that the GST Council is a prime example of cooperative federalism, noting it is the only constitutional body created since independence. “Following the tax reforms, 99 percent of goods under the 12 percent GST slab have moved to 5 percent,” she said.

“The rejig has resulted in 90 percent of items under 28 percent tax slab slipping into the 18 percent bracket. The GST revenues grew to Rs 22.08 lakh crore in 2025 from Rs 7.19 lakh crore in 2018 when it was introduced. The taxpayer's number grew to 1.51 crore from the earlier 65 lakh,” she added.

Sitharaman further said that before undertaking the tax rate rejig, the NDA government kept five filters- reduction of rate for poor and middle class, fulfilling aspirations of middle class, benefiting farmers community, pro-MSME and sectors that are useful for the country in creating jobs and export potential.

Flaying the previous UPA regime, she described the earlier tax structures as “tax terrorism”, saying that a lot of exercise went into the implementation of GST as part of one nation-one tax. “The UPA government went for 10 years. You could not come with GST. You could not convince the states about GST. I could have given a harsh political reply. But not today,” she said.