Prime Minister Narendra Modi addressed the nation on the eve of Navratri, announcing the launch of GST 2.0, a sweeping tax reform he described as the beginning of a “Bachat Utsav” or festival of savings.
Watch PM Modi’s full address here:
My address to the nation. https://t.co/OmgbHSmhsi
— Narendra Modi (@narendramodi) September 21, 2025
“From tomorrow, the nation will celebrate GST Bachat Utsav. Your savings will increase, and you will be able to buy your favourite things. This reform will benefit every section of society,” Modi said in his address.
GST 2.0: Simplified Two-Tier System
At the core of the reform is a simplification of the Goods and Services Tax structure into two tiers of 5% and 18%. Beginning September 22, nearly 99% of goods previously taxed at 12% will shift to the 5% bracket, while about 90% of items earlier under 28% will move to 18%. A 40% compensation cess will remain on luxury and sin goods.
Modi credited the reform to the combined efforts of the Centre and states, saying it fulfilled the vision of “one nation, one tax” and freed businesses and citizens from the “maze of various taxes” that inflated costs before 2014.
“This reform will accelerate India’s growth story, simplify business, and ensure that every state becomes an equal partner in the journey of development,” he said.
Double Relief for the Middle Class
Linking the reform with the government’s earlier decision to make income up to ₹12 lakh tax-free, Modi called GST 2.0 a “double bonanza” for the middle class.
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“With the reduction in GST, it will be easier for the citizens of the country to fulfil their dreams,” he said, adding that the twin decisions would save Indians over ₹2.5 lakh crore annually.
The Prime Minister highlighted that in the past eleven years, 25 crore Indians had risen out of poverty, forming a new dynamic middle class with aspirations that these reforms are designed to support.
Swadeshi and Atmanirbhar Bharat Push
Alongside the economic reforms, Modi renewed his call for swadeshi and self-reliance.
“The comb in our pocket is made in India or not, we don’t know. We need to buy made-in-India products. We need to make every household a symbol of swadeshi. Garv se kaho ye swadeshi hai,” he urged.
He linked GST 2.0 to the broader Atmanirbhar Bharat agenda, calling on households, shopkeepers, and state governments to adopt swadeshi practices to boost domestic production and investment.
“Just as the country’s independence gained strength from the mantra of swadeshi, similarly, the country’s prosperity will also derive its power from the mantra of swadeshi alone,” Modi said.
