Modinomics: The architecture behind GST reforms
India’s growth story has a new chapter. When the Modi government was elected to power in 2014, it brought a new hope of development. Through the years, government took steps to transform the dynamics of India’s economy positively. First breakthrough came with Jan Dhan Yojna which promoted the principles of financial inclusivity. For the first time in India, banking was made highly accessible to the common masses. This had set the stage for Direct Benefit Transfer (DBT) where the citizens got the disbursed funds directly into their bank accounts. Former Prime Minister Rajiv Gandhi gave a statement in Kalahandi regarding corruption that if the government sends 1 rupee, the final beneficiary gets 15 paise. This has become a thing of the past. Now, the exact amount disbursed by the government reaches the final beneficiary under the Modi government. The government subsequently brought schemes like MUDRA Yojna, Goods and Services Tax (GST), PM-Kisan Samman Nidhi Yojna, Pradhan Mantri Awas Yojna, Make in India and many more revolutionary steps for the welfare of citizens. Now, the Modi government has brought GST Reforms and reemphasised the significance of Swadeshi goods.
The Next Generation GST Reforms by Prime Minister Narendra Modi have brought a revolution in the country. At a time when the global order is going through great churning, India is gradually building itself as a Self-Reliant power which is Atmanirbhar Bharat. The GST slabs were four in number earlier which were 28%, 18%, 12% and 5%. Now they have been simplified into two slabs 18% and 5%. Several goods have been brought to the lower slab or made nil, providing great relief to the citizens. At the same time, the government is pushing for Swadeshi goods. Leading by example, Home Minister Amit Shah shifted to Zoho Mail which was followed by rest of the country.
The reforms came amidst the festive season. True respect has been paid to our most revered Maa Durga during Navratri. In 2017, the Modi Government ended the regime of tax terrorism by introducing Goods and Services Tax (GST). It ended the plethora of taxes and rationalised the system. Earlier, there were multiple taxes like VAT, Octroi, Excise and other taxes. This contributed to a difficulty in doing business and burdened the end consumer. But today, we are a witness to how the government can actually promote ‘Ease of Doing Business.’ The alignment is with the vision of building a sustainable living standard for every individual in the country.
The supply chain of the country has largely benefited. It is favourable to both the sellers and consumers. On one side, employment generation is taking place, and on the other side, the consumers are getting better leverage. This is an ideal condition for the market. Growth is prospering across different sectors. From essential goods, textiles, healthcare, education to technology, every aspect has been touched.
The Modi government, which provided LPG cylinders to every household, is providing cheaper utensils by slashing the taxes. But more importantly, the prices of food items have also come down due to these reforms. The reduction in grocery bill supports household budget. It all takes an empathic government to consider such basic points which are fundamental to human needs.
Healthcare was one of the most neglected areas and was taken for granted. But the Modi Government made necessary interventions. After taking a profound step like Ayushman Bharat, these reforms are a part of an important move. Both health and life insurance have been brought to 0% slab. Insurance coverage and penetration will automatically broaden the base. Medical equipment, drugs and medicines have also become cheaper. This will cater to the medical needs of the citizens.
Education is one of the top priorities of the government. It has undertaken various initiatives to make education more accessible and inclusive. From opening schools to bringing in NEP 2020, the government has taken many initiatives. These reforms bring down the prices of stationery and books. It shows the commitment towards building strong fundamentals for education. Farmers are very close to the Prime Minister’s heart. He has taken several welfare initiatives in their favour. The new reforms bring down the GST on tractors from 18% to 5%. Farm machinery and items like bio-pesticides, micro-nutrients and other essentials for farming have become more economical. The agriculture sector will surely get a competitive edge.
In today’s age of technology, electronic items are fundamental to human needs. From Air Conditioners to televisions, the prices have been slashed down. In festival season, people have purchased electronic items, especially during the week of Diwali and on the occasion of Dhanteras. This has made the timing of the reforms perfect.
The Automobile Sector becomes another gainer. Financial institutions are reporting unprecedented demand for new motor vehicles. Cars and bikes have become more affordable especially cherishing the dreams of the middle class and lower middle class. With a single stroke, the whole sector has been taken towards the upside. In this festive season of Durga Puja and Diwali, people buy new clothes for themselves. This is resulting in the upsurge of sales in the textile industry. People are being able to buy cheaper clothes. The textile industry supports a significant part of the population which will definitely have greater wages and profit.
In the quest to make housing more affordable, the rate of basic items such as cement, marble and granite blocks has come down. The government’s priority of universal housing has gained traction after this move. Both builders and buyers are happy as the real estate sector becomes more cost-effective. The toy industry, which has already grown after the Prime Minister’s call for Swadeshi toys is benefiting from this move. After his call, the market capitalisation industry has grown by leaps and bounds, projected to reach USD 3 billion by 2028 before the reforms. These reforms will prove to be a game-changer for the toy industry as well.
The number of sectors that have been positively pushed by these GST Reforms are beyond comprehension. From small-scale traders to large industries, it provides impetus to all. Definitely, it will further propel the boom of Micro, Small, and Medium Enterprises (MSME) along with the Startups. These enterprises will have a greater role to play in the future.
The Modi government is simultaneously promoting Swadeshi goods. As a staunch ambassador of Vocal for Local, the government has created both domestic and international marketspace for goods that are made in India. Prime Minister Modi urged people they use Swadeshi goods. It should be a matter of pride to use Swadeshi products. This will directly empower the indigenous industries and support them economically. In turn, it will largely benefit the growth of the country.
The use of Swadeshi goods helps in employment generation in the country. The workforce of the country will greatly benefit, and the growth of employment is directly proportional to it. The MSME sector, which employs 62% of India’s employment according to the report of McKinsey Global Institute (MGI). This sector is projected to grow further due to the Swadeshi initiative. The mantra of “Har Ghar Swadeshi, Ghar Ghar Swadeshi” has become a movement in the country. Consciousness is constantly rising among the citizens. The Startup culture, which is directly patronised by the Modi government, is taking the sale of Swadeshi goods to greater heights. Initiatives such as ‘One District One Product’ are being supported by the government.
The Prime Minister has given a call to the citizens of the country to build technology and present innovative solutions. This will definitely give India a chance to compete on the global platform in a more assertive way. We have the potential to build the leading tech companies of the future. Definitely, this can make India the tech capital of the world.
Swadeshi Mela and Swadeshi Utsav have been organised across the country. They are patronised by the BJP governments in the different states. The Delhi government’s Department of Industries, in collaboration with DSIIDC, organised Swadeshi Utsav 2025, a three-day festival dedicated to the theme “Swadeshi: Replacing Foreign Goods with Indigenous Products.”
It aims to provide homegrown companies, ventures and small-scale businesses to present their products.
Today Indian businesses feel empowered under Prime Minister Modi’s leadership. In the earlier governments, there was a mythical belief that foreign goods are superior in quality but the governments didn’t take any substantial effort. But today, the high-quality products produced by Indians in India are getting the right recognition.
As a mark of patriotism, it is our duty to promote the culture of Swadeshi goods. We must boycott foreign goods in the interest of our country. The Swadeshi movement started in India as a response to the partition of Bengal. In the 20th century, this move was directed against the Britishers. Today, this movement is to provide a powerful drive to the Indian industries at every level. The dream of ‘Make in India’ will eventually get fulfilled in every sector.
The success of the Government e-Marketplace (GeM Portal) is a reflection of this Aatmanirbhar Bharat’s trajectory. This portal has built an ecosystem that takes on board the businesses of the country for public procurement. It is providing an opportunity, especially to the MSMEs to have a fair chance of involving themselves in this process. In the financial year 2023-24, the Government e-Marketplace (GeM) recorded a Gross Merchandise Value (GMV) exceeding ?4 lakh crore, marking a growth of nearly 1,000 times compared to FY 2016-17. As of July 30, 2024, the cumulative GMV for goods and services traded through GeM has surpassed ?9.82 lakh crore since its inception.
NGOs and Civil Society organisations are running awareness campaigns across the country for the promotion of Swadeshi goods. From youngsters to old people, everyone is participating with great zeal. From urban areas to rural hinterlands, the demand for indigenous products is growing constantly. This is the face of New India.
The Opposition led by Congress, shockingly but not surprisingly started following their toolkit after such important reforms. Leader of the Opposition Rahul Gandhi in July had already said that the Indian economy is dead. But the economy has shown no such sign. Rather, it is on a growth spree. The country should remember that he was the same person who criticised the ‘Make in India’ initiative in the Parliament. This was directly against the Swadeshi principles of our freedom fighters. We should not even forget that he was a staunch critique of the GST Reforms, which brought great convenience to the citizens by streamlining the tax framework.
On a factual level, the United Nations (UN) projects India’s economy to expand by 6.3% in 2025 and 6.4% in 2026. The Confederation of Indian Industry (CII) offers a slightly more promising outlook, estimating growth between 6.4% and 6.7%. Similarly, the International Monetary Fund (IMF) is anticipating 6.4% growth for both 2025 and 2026. Global Rating agencies such as S&P Global have upgraded India’s credit rating, which shows higher faith in the Modi government. The Congress and other Opposition parties keep making false claims without any basis.
It seems the Opposition leaders live in their own bubble. They want to hide the failures of their successive governments at the centre when they were in power. In the States, they have already failed terribly. For instance, in Himachal Pradesh, where the Congress is in power, they are struggling to even pay the salaries to the state government employees and run offices. Rahul Gandhi and the whole Congress ecosystem should focus on building the economy of the states where they are in power instead of making loose talk. Those who cannot even manage a state’s economy can never manage the country’s economy. This is the reason the country has unwavering faith in the Modi government and continues to do so.
This year, India became the 4th largest economy in the world under Prime Minister Modi’s leadership. Now, it marches for the top ranks. These GST Reforms and call for Swadeshi goods will surely play a crucial role in India’s growth story. It will directly and indirectly impact every citizen of the country in a highly positive manner. History will remember how Modinomics changed the fate of the country and built the dream of Viksit Bharat.
The writer, a former Jharkhand BJP President, is a Member of Parliament (Rajya Sabha) & Member of BJP’s National Executive; views are personal
