Daijiworld Media Network - Chennai

Chennai, Sept 2: Union Finance Minister Nirmala Sitharaman on Tuesday said the upcoming next-generation GST reforms are aimed at creating a more open, transparent economy while reducing the compliance burden, particularly for small businesses and startups. Speaking at the 120th Foundation Day of City Union Bank in Tamil Nadu, the Finance Minister outlined a vision of simplified regulations, lower costs, and improved access to credit.

Sitharaman highlighted that Prime Minister Narendra Modi has announced the formation of a task force to drive these reforms forward with a clear mandate: build a more enabling ecosystem for startups and MSMEs, simplify the regulatory landscape, and make taxation more predictable and business-friendly. She indicated that these reforms are expected to be central to discussions at the upcoming GST Council meeting.

“All banks must take the lead not just in expanding credit but also in supporting infrastructure development and providing timely, need-based funding to MSMEs,” she said, stressing the critical role of financial institutions in supporting India’s economic goals.

Pointing toward the broader ambition of 'Viksit Bharat 2047', the Finance Minister said that financial inclusion remains a core priority. She noted that over the past 11 years, 56 crore Jan Dhan accounts have been opened, collectively holding Rs 2.68 lakh crore in deposits. Of these, 67% were opened in rural and semi-urban areas, and 56% are held by women, underlining the government’s push for inclusive banking.

The GST Council is set to meet later this week for a two-day session where it will review the tax rates on more than 150 items. As part of a major overhaul, the council is expected to replace the existing four-rate structure with a simplified two-rate framework. Many items currently taxed at 12% and 18% may be shifted to the 5% slab or exempted altogether, a move that could deliver substantial savings for consumers and businesses alike.

Earlier, in his Independence Day address, PM Modi had hinted at a Diwali bonanza through sweeping GST changes, promising citizens a simpler, more efficient tax regime that supports growth and reduces the cost of living.

With the reforms now close to rollout, businesses, especially MSMEs and startups, are watching closely as the government looks to strike a balance between revenue needs and economic stimulus through tax restructuring.