GST 2.0: India's biggest tax reset since 2017, benefits middle class

As covered by The Economic Times, Indians woke up to cheaper essentials and consumer goods as GST 2.0 rolled out, arguably the biggest tax reset since 2017. Essentials like milk, medicines, and insurance premiums, alongside cars and durables, are now lighter on the pocket, effectively handing the middle class a ₹2 lakh crore “coupon.” With perfect festive timing, this is not just household relief but also a deliberate demand stimulus.   The reform simplifies slabs, reduces compliance headaches for businesses, and, if the cuts are passed on fairly, delivers tangible relief even in rural and semi-urban India where price sensitivity is highest. Lower costs can ease inflationary pressures, boost sentiment, and push discretionary spending that has been subdued in recent quarters. But the story isn’t without fine print. An estimated ₹48,000 crore revenue hit could stretch both Centre and State budgets if higher consumption volumes don’t make up the gap. Add rising fuel and logistics costs, and there’s a real risk that the full benefit doesn’t trickle down to consumers as intended.   Ultimately, GST 2.0 is as much a political signal as an economic one: simplifying taxes, energising demand, and positioning consumption as the growth driver. Its success will hinge on transparent pass-through, fiscal discipline, and inflation management. If executed well, this could be the start of India’s most consumer-friendly tax regime yet. #LexEtAl #GST #IndianEconomy #TaxReforms #PublicPolicy #MiddleClassIndia #ConsumptionGrowth #FiscalPolicy #EaseOfDoingBusiness  

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