India Inc sees capex, demand surge after Prime Minister Mr. Narendra Modi's Next-Gen Goods and Services Tax (GST) overhaul plan

India’s corporate leaders are optimistic about a revival in capital expenditure and consumer demand following Prime Minister Mr. Narendra Modi’s announcement of comprehensive goods and services tax (GST) reforms, described as a “Diwali gift” during his Independence Day address. The reforms aim to simplify compliance, lower tax rates, and modernise the GST framework to make it more growth-oriented. Industry executives expect measures such as rationalising rates into two slabs, easing the tax burden on micro, small and medium enterprises (MSMEs), cutting levies on essential goods, and using technology-driven processes like pre-filled returns and faster refunds to encourage investment. Sectors such as manufacturing, logistics, housing, and consumer goods are seen as key beneficiaries.

President of the Federation of Indian Chambers of Commerce & Industry (FICCI), Mr. Harsha Vardhan Agarwal, welcomed the overhaul, calling it a step towards reducing compliance, eliminating redundant regulations, and positioning India as a global manufacturing hub. MD and CEO of Daimler India Commercial Vehicles, Mr. Satyakam Arya, noted that simplified GST would lower operating costs and boost demand for commercial vehicles, while Founder and Chairman of Signature Global (India) Ltd, Mr. Pradeep Aggarwal, highlighted its potential to improve cash flows and make housing more affordable. Experts believe that a two-rate GST structure will reduce disputes, align India with global standards, and enhance compliance. Partner at Deloitte India, Mr. MS Mani, added that businesses must self-regulate in passing on the benefits of lower rates to consumers. Economists say the move could attract both domestic and foreign investment, strengthen exports, and accelerate growth as India targets developed nation status by 2047. Dabur India CEO, Mr. Mohit Malhotra said the reforms signify strong confidence in India’s consumption-led growth story.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.