On 30th June 2017, at the stroke of midnight, a ceremonial joint session was held in Parliament to launch the country’s historic legislation, the GST. The then President of India, Shri Pranab Mukherjee, called it a “tribute to the maturity and wisdom of India’s democracy”. He highlighted the long journey of GST and how it would transform our economy.

True to his words, since the launch of this reform, despite economic shocks from global uncertainties, the Indian economy continues to grow at an estimated 6-7 per cent annually. With the launch of GST 2.0, the next generation of reforms, the OECD projects India’s growth rate at 6.7 per cent, an upward revision from the earlier 6.2 per cent.

India’s indirect taxation journey can be seen in three phases: before GST, after GST, and now with GST 2.0. The first phase was marked by huge revenue leakages due to hoarding, black marketing, and corruption.

The second phase, post-GST, ushered in a wave of technology-driven reforms such as e-way bills. A robust IT backbone was created, which ensured transparency and efficiency. States were adequately compensated for revenue losses and encouraged to increase capital expenditure, adding a multiplier effect to the economy.

As a result, in 2024-25, gross GST collections hit a record `22.08 lakh crore, marking a year-on-year growth of 9.4 per cent. This reflected the growing formalisation of the economy and improved tax compliance. In essence, GST brought back to the system revenue that was once lost. For citizens, this is a double bonanza. In the Union Budget 2025-26, the Finance Minister slashed personal income tax rates. Now, with the rationalisation of GST, the economy will receive a further boost.

This demonstrates the government’s relentless, stable, and visionary economic management. It is estimated that the new GST rates will boost domestic consumption by nearly ₹2 lakh crore and provide fresh impetus to public expenditure while boosting private investor confidence. It will enhance purchasing power and put more money into the hands of people.

Recognising the importance of these reforms, the Andhra Pradesh Assembly passed a resolution in support of GST 2.0. Andhra Pradesh alone is expected to benefit by nearly a Rs 8,000 crore. With AP contributing close to 8 per cent of India’s total exports, GST 2.0 will give tremendous impetus to manufacturing, MSMEs, and exports. With nearly 29 per cent of the State’s GDP coming from agriculture and allied activities, the reduction of GST on tractors, drip irrigation systems, sprinklers, tractor tyres, and parts to just 5 per cent is a true tribute to our Annadatas during this festive season.

The reforms will also support Andhra Pradesh’s fisheries sector, which contributes nearly 41 per cent of India’s fish production. Additionally, sectors such as automobiles, dairy, pharmaceuticals, medical devices, handicrafts, and MSMEs in Andhra Pradesh are set to reap significant benefits during the festive season, helping realise the vision of Swarna Andhra. The RBI, in its latest monetary policy report, mentioned that about 11.4 per cent of the CPI basket would be impacted by GST rationalisation. This will help contain inflation below target levels during FY 2025-26 and mitigate the adverse impact of global trade uncertainties, including US tariffs. The Har Ghar Swadeshi, Ghar Ghar Swadeshi campaign, together with GST 2.0, will not only brighten our homes this Diwali but will also uplift the lives of every Indian — the farmer, the small business owner, the worker, and every household.

This reform is not just about taxation; it is about empowering people and strengthening India’s growth story.

Dr Byreddy Shabari is the Member of Parliament and the Deputy Floor Leader of TDP in Parliament. Adarsh Kuniyillam is a Parliament and policy expert.