PM Modi to address nation at 5 PM today on GST reforms

PM Modi to Address Nation at 5 PM Today on GST Reforms

Introduction: A Pivotal Moment for India's Economic Roadmap

On September 21, 2025, Prime Minister Narendra Modi is set to address the nation at 5:00 PM IST from New Delhi, in what is anticipated to be a landmark speech outlining the next phase of Goods and Services Tax (GST) reforms. This address, confirmed by the Prime Minister's Office (PMO) through a press release on September 20, comes on the eve of the GST Council's decision to implement sweeping changes effective September 22, 2025—the first day of Navratri. As the architect of GST 1.0 in 2017, Modi's intervention signals a "double dose of support and growth for the nation," focusing on easing the tax burden for common citizens, boosting small businesses, and streamlining compliance in what he has termed "GST 2.0" during his August 15 Independence Day speech.

GST, India's unified indirect tax regime introduced on July 1, 2017, has evolved from a complex 4-tier structure (0%, 5%, 12%, 18%, 28%) to a more rationalized system, generating ₹1.74 lakh crore in August 2025 alone, per the Ministry of Finance. The upcoming reforms, approved by the GST Council on September 4, 2025, under Finance Minister Nirmala Sitharaman's chairmanship, include slashing the 28% slab for 150+ items, introducing a new 0% category for essentials, and enhancing digital compliance tools. Modi's speech, broadcast live on Doordarshan and streamed on the PMO's YouTube channel, is expected to elaborate on these "panch ratna" (five gems) of reforms, emphasizing their role in Viksit Bharat (Developed India) by 2047. With the economy growing at 6.5% in Q1 FY26 and inflation at 4.2%, this address isn't mere announcement—it's a blueprint for inclusive growth, projected to inject ₹2 lakh crore into consumer spending by Diwali. This 2000-word preview, based on GST Council minutes, PMO briefings, and economic analyses, unpacks the reforms' pillars, Modi's vision, implementation mechanics, stakeholder impacts, challenges, and long-term dividends, positioning September 21, 2025, as a watershed for India's fiscal future.

The Genesis of GST 2.0: From Independence Day Vision to Council Consensus

Prime Minister Modi's blueprint for GST 2.0 was first sketched on the ramparts of the Red Fort during his 79th Independence Day address on August 15, 2025, where he hailed the original GST as a "revolutionary step" that unified India's fragmented tax landscape but acknowledged its "teething pains." "GST 2.0 is a double dose of support and growth for the nation," Modi declared, vowing "next-generation reforms" to make the system "citizen-centric and business-friendly." This vision, rooted in feedback from 1.5 crore MSMEs and 1.3 crore taxpayers via the MyGov portal (launched July 2025), crystallized at the 55th GST Council meeting on September 4 in New Delhi.

Chaired by Sitharaman and attended by state finance ministers, the Council approved five key "panch ratna" reforms: Rationalizing slabs to three tiers (0%, 5%, 12%, 18%), scrapping the 28% bracket for 150+ goods, introducing a 0% category for essentials, enhancing compliance via AI-driven portals, and boosting refunds for exporters. Sitharaman, in a post-meeting presser, called it "the government's Diwali gift to consumers," projecting a 2% GDP uplift by FY27. The decisions, minuted in the Council's September 5 release, stem from the 15th Finance Commission's recommendations and a 2024 Deloitte study highlighting GST's 10% compliance burden on small traders.

Modi's 5:00 PM address on September 21, timed for prime-time reach (expected 300 million viewers via DD and YouTube), will unpack these gems, drawing parallels to the 2017 rollout that consolidated 17 taxes into one, generating ₹2.1 lakh crore monthly by 2025. As the reforms kick in September 22, aligning with Navratri's prosperity theme, Modi's speech—his 20th such address since 2014—aims to rally public support, framing GST 2.0 as "ease of living" for the aam aadmi.

Pillar 1: Slab Rationalization – From 4 Tiers to a Simpler Trio

The cornerstone of GST 2.0 is slab simplification, reducing the current four rates (5%, 12%, 18%, 28%) to three (0%, 5%, 12%, 18%), with the 28% slab eliminated for 150+ items. Effective September 22, this shift, approved unanimously by the Council, targets luxury and sin goods like tobacco and aerated drinks (now 18%), while essentials like unpacked food grains and life-saving drugs enter the 0% bracket. Sitharaman's September 5 briefing highlighted: "The 28% slab, applied to just 5% of goods, was a compliance nightmare—now, 95% fall under 0-18%, easing 20% of small traders' burdens."

Economic modeling by the National Institute of Public Finance and Policy (NIPFP, 2025 study) projects a 1.5% consumption boost, adding ₹1.5 lakh crore to GDP by FY26. For consumers, it means cheaper durables: Air conditioners drop from 28% to 18% (₹5,000 savings on ₹30,000 unit), refrigerators from 28% to 18% (₹4,000 off ₹25,000). Small businesses gain: A Delhi trader dealing in packaged goods saves ₹10,000 quarterly in compliance costs, per FICCI estimates. Challenges: Revenue neutrality—₹50,000 crore shortfall offset by widening the 18% base via e-commerce tracking.

Modi's speech will likely emphasize this as "tax relief for the middle class," tying to Viksit Bharat's inclusive growth.

Pillar 2: The 0% Slab Expansion – Essentials for the Aam Aadmi

A game-changer for low-income households, the new 0% GST slab covers 100+ essentials previously taxed at 5-12%, including unpacked rice, millets, fresh vegetables, and life-saving drugs like insulin and cancer therapies. Effective September 22, this reform—pushed by states like Kerala and Tamil Nadu—exempts 40% of FMCG items, per Sitharaman's data. The Council, in its September 4 resolution, expanded it from 2024's 50 items to 150, adding sanitary napkins, schoolbooks, and Ayurvedic medicines.

Impact: A rural Bihar family saves ₹500 annually on groceries, per NIPFP; urban consumers ₹1,000 on healthcare. The 0% bracket, revenue-neutral via luxury taxes, aligns with Modi's "zero-tax on life's basics" pledge from the 2025 Budget. Sitharaman noted: "It's a Diwali dhamaka—essentials free from GST's grip." Challenges: Leakage prevention through GSTN's AI audits, targeting 10% evasion in exempt categories.

In his address, Modi may invoke Ambedkar's equity vision, positioning 0% as social justice.

Pillar 3: Digital Compliance Overhaul – AI and Ease of Doing Business

GST 2.0's tech pillar introduces AI-driven portals for real-time filing, reducing compliance time from 20 hours to 5 per quarter for small taxpayers. The GSTN's upgraded GSTR-3B app, rolling out September 22, auto-populates invoices via e-invoicing (mandatory for ₹5 crore+ turnover), cutting errors by 30%, per a 2025 Deloitte study. The Council approved ₹10,000 crore for this, including blockchain for input tax credit (ITC) verification, benefiting 1.3 crore taxpayers.

For MSMEs (6.3 crore units), the simplified return—quarterly for <₹5 crore turnover—eases burdens, with AI flagging discrepancies. Sitharaman highlighted: "From 1,000 pages to 10 clicks—GST 2.0 is digital democracy." Projections: 15% compliance rise, ₹50,000 crore revenue boost by FY27. Challenges: Digital divide—40% rural MSMEs lack internet—addressed via 5,000 Common Service Centers.

Modi's speech will likely tout this as "tech for the common man," linking to Digital India.

Pillar 4: Exporter Refunds and Trade Boost – Global Competitiveness

Exporters gain from faster refunds—90 days vs. 180—via automated portals, with ₹1.5 lakh crore disbursed in 2024 now accelerating to 60 days. The Council slashed IGST on exports to 0% for 50 sectors, including textiles and pharma, per Sitharaman's data. This addresses the ₹40,000 crore inversion credit backlog, boosting competitiveness.

Impact: Gems and jewelry exports (₹2 lakh crore 2024) rise 10%, per FIEO. Challenges: Fake claims—AI audits target 5% fraud. Modi's address may frame it as "Make in India 2.0," tying to $1 trillion export goal by 2030.

Pillar 5: Small Business Simplification – The MSME Lifeline

For 6.3 crore MSMEs, GST 2.0 introduces composition schemes for <₹1.5 crore turnover at 1% flat rate, up from 0.5%, with quarterly filing. The Council exempted 50 services (consulting, tutoring) from reverse charge, easing 20% compliance costs. Sitharaman: "Small traders get big relief—1% tax, no audits."

Benefits: A Surat weaver saves ₹5,000 quarterly; national MSME contribution to GDP rises 2%. Challenges: Awareness—SVEEP-like campaigns reach 1 crore by December. Modi's speech will spotlight "MSME as engine," invoking Atmanirbhar Bharat.

Implementation Mechanics: From September 22 Rollout to Compliance Horizon

Reforms activate September 22, 2025, via GSTN's portal update—slab changes auto-applied to invoices. Taxpayers get 30-day grace for adjustments, with helplines (1800-103-4786) for queries. States like Uttar Pradesh (50% MSMEs) lead pilots, training 5 lakh traders via webinars.

Timeline: September 22-30 transitional filings; October 1 full compliance. Enforcement: 10,000 GST officers, AI audits for 20% high-risk returns. Revenue projection: Neutral short-term, +₹1 lakh crore FY26 via base widening.

Challenges and Criticisms: Navigating the Reform Roadblocks

Skeptics flag revenue dips (₹50,000 crore from slab cuts), per Congress's P. Chidambaram on September 5: "Populist, but unsustainable." MSME bodies like FISME worry digital mandates exclude 40% offline traders. States like Kerala critique central overreach, but consensus prevailed.

Modi's address will address: "Reforms are for people, not politics—challenges met with collaboration."

Economic and Social Dividends: A Diwali Boost for Viksit Bharat

GST 2.0 injects ₹2 lakh crore into consumption by Diwali 2025, per NIPFP, lifting GDP 1.5%. Socially, 0% essentials aid BPL families (₹500/year savings), MSME job creation +5 million by FY27. Sitharaman: "It's ease of living—taxes that empower."

Conclusion: Modi's 5 PM Address – Igniting GST 2.0's Flame

Prime Minister Narendra Modi's September 21, 2025, 5:00 PM address heralds GST 2.0's dawn—a rationalized trio of slabs, 0% essentials, digital ease, exporter refunds, and MSME lifelines effective September 22. From Independence Day vision to Council consensus, it's a "double dose" for growth, projected to add ₹1.5 lakh crore to GDP. As Modi speaks, 1.3 crore taxpayers listen—reforms not as tax tweaks, but triumphs for the aam aadmi. In Viksit Bharat's march, GST 2.0 isn't end—it's evolution.