Just hours before the groundbreaking two-slab Goods and Services Tax (GST) regime was set to launch at midnight on September 21, 2025, Prime Minister Narendra Modi enthusiastically declared it a “bachat utsav,” or a festival of savings. He also hailed it as a pivotal stride towards “aatmanirbharta,” fostering economic self-reliance across India.
During a nationwide televised address, PM Modi highlighted the profound connections between the simplified GST framework—moving from a four-slab to a more streamlined two-slab system—and its subsequent benefits. He emphasized that easier compliance and reduced prices would encourage Indians to prioritize domestically manufactured goods, thereby diminishing reliance on foreign products and significantly bolstering the nation’s Micro, Small and Medium Enterprises (MSMEs).
“Be proud to say you are swadeshi, and buy and sell swadeshi goods,” Mr. Modi urged, translating to, “Garv se kaho yeh swadeshi hai aur main swadeshi khareedta aur bechta hoon.” He further elaborated that India’s historical prosperity was built on its reputation for producing and trading world-class commodities, underscoring the importance of reviving this legacy.
The Prime Minister’s address came at a critical juncture, influenced by ongoing punitive trade tariffs imposed by the U.S. and a generally uncertain global trade environment.
Modi characterized these next-generation GST reforms, coupled with an Income Tax exemption of up to ₹12 lakh per annum for individuals, as a “double bonanza” for India’s middle and emerging neo-middle classes. He asserted that these measures would result in household savings of nearly ₹2.5 lakh crore due to reduced prices of goods. The Prime Minister framed this policy approach as his government’s embodiment of “nagarik devo bhava“—where the citizen is revered as divine—in its public policy.
“On the auspicious first day of Navratri, our nation embarks on its initial steps towards aatmanirbharta,” the Prime Minister declared. He recounted the extensive consultations with stakeholders and the unanimous agreement from all State governments that led to the adoption of the original GST regime in 2017. Modi also urged State governments to actively promote the manufacturing of Indian products. He elaborated on the recent simplification of the GST structure, reducing it from four slabs to two, which now sees many essential daily-use items, previously taxed at 12%, moved into the more affordable 5% slab.
In a video clip, Prime Minister Narendra Modi stated, “To achieve the goal of a ‘Viksit Bharat’ (Developed India), we must follow the path of ‘Atmanirbharta’ (self-reliance), and a significant responsibility to make India self-reliant lies with our MSMEs. Whatever the people…”
“I am pleased that both our traders and the MSME sector have warmly received these next-generation GST reforms,” Mr. Modi commented. He urged the MSME sector to remember that India’s historical prosperity was founded on its exceptional manufacturing capabilities, particularly within the MSME segment. He called upon them to embrace this spirit and reclaim their reputation for producing world-class goods.
The Prime Minister also issued a strong appeal for increased domestic consumption, noting that his government had successfully uplifted 25 crore people from below the poverty line over the past 11 years. “While the newly exempted middle and neo-middle classes will save ₹2.5 lakh crore through these reforms, it is imperative for everyone to remember that the vision of a ‘Viksit Bharat’ (developed India) is only achievable through self-reliance,” Mr. Modi stated. He added, “For decades, foreign goods have permeated our daily lives, and it is time we consciously replace them with our own indigenous products.”
Prime Minister Modi initially revealed the Union government’s plans to reform the GST regime during his traditional Independence Day address from the Red Fort in New Delhi. Later in September, the GST Council officially approved the transition to the new two-slab system.