GST Reforms to Inject ₹2 Lakh Crore into Economy, Says FM Sitharaman

FM Sitharaman stated that GST reforms under GST 2.0 are expected to inject approximately ₹2 lakh crore into the economy through rate rationalization and simplification. The reforms include streamlined compliance processes, reduced input cascading, and clarity on exemptions. The Finance Ministry expects that lower effective rates will increase consumption, encourage formalization, and boost tax compliance, leading to higher aggregate revenue and liquidity in the market. The FM highlighted that this initiative will support both consumer demand and business growth, particularly in MSMEs and manufacturing sectors. Analysts suggest that the inflow of additional funds can catalyze private investment, improve working capital, and accelerate economic recovery. These measures are consistent with the government’s vision of creating a stable tax environment that balances growth with fiscal prudence.