PM Modi's Next Generation GST Reform: Everyday Essentials Will Become Cheaper by Diwali 2025

Prime Minister Narendra Modi, in his Independence Day speech, announced a sweeping set of GST reforms designed to lower the tax burden on consumers and boost household savings. The new GST structure aims to simplify tax rates and make many daily necessities significantly more affordable—potentially by Diwali 2025.

What’s Changing?

New GST Slabs Proposed:

• 5%: Most items currently taxed at 12% will move down to 5%.

• 18%: Many goods in the 28% slab will shift to 18%.

• 40%: A new “sin goods” slab for items like tobacco, cigarettes, and beer.

Goods previously taxed at 12% (now slated for 5%) include:

• Milk, curd, dry fruits

• Frozen vegetables, sausages, pasta, jams

• Snacks (bhujia, etc.), tooth powder, milk bottles

• Carpets, umbrellas, bicycles

• Utensils, furniture, pencils, sharpeners

• Handbags (jute/cotton), shoes under ₹1,000

What Will Become Cheaper?

• Groceries: Milk, curd, snacks, dry fruits, pasta, jams

• Home Essentials & Stationery: Pencils, sharpeners, utensils, furniture

• Agriculture & Mobility: Agricultural equipment, bicycles

• Education: Tuition and related services

• Health & Insurance: Medicines, insurance policies

• Electronics & Appliances: TVs, washing machines

• Personal Goods: Handbags, shoes

Impact

• Families: Direct relief through lower prices on everyday goods.

• Farmers: Cheaper agricultural equipment.

• Students: Lower cost of stationary and education-related products.

• Economy at Large: Increased consumer demand and spending.

Implementation

Proposals are under review by the GST Council, which includes all state finance ministers. Union Finance Minister Nirmala Sitharaman chairs the council, and recommendations will be debated and approved in the coming weeks.

PM Modi promised that this reform will bring a “double Diwali” for Indian families—a wonderful festive gift that will increase purchasing power and stimulate the economy.