September 22, 2025

Hold your hats, India’s economy is in for a spicy shake-up, thanks to the dazzling GST 2.0! Chief Economic Advisor Anantha Nageswaran, speaking at the Network18 Reforms Reloaded 2025 summit in Delhi, shared some juicy insights about how this new GST reform will give a major boost to domestic demand – think of it like the engine revving up India’s economic growth. Earlier, Nageswaran had feared tariffs would slow India’s growth by 0.4-0.5% this year and 1% next year. But now? "GST reforms may lower this impact," he says with hope. What does this mean? India’s GDP in FY26 could be zooming towards the higher end of the 6.3-6.8% range! And he’s quite confident of Q2 GDP numbers flirting with a 7% growth mark. Wondering about foreign investments? Nageswaran assures, "FDI will not be impacted in the medium to long term." In fact, GST and deregulation could spark a surge in foreign investments! Adding more flavor, the Union Budget’s tax concessions and reliefs will create a multiplier effect, potentially pumping over Rs 2.5 lakh crore into the economy. But, he tempers this excitement by noting some uncertainties might soften the punches. Curious about how states feel with GST rate cuts? Surprisingly, state revenue collections have actually grown despite lower effective GST rates. Talk about a win-win! On the fiscal front, Nageswaran is confident India will keep its gross fiscal deficit at 4.4% of GDP in FY26. The festival season’s spending spree and robust revenue growth are on India’s side. About borrowing, the government plans to keep market borrowings steady for the second half of the year, totaling Rs 14.82 trillion for FY25 – no surprises there. And inflation? Good news! Nageswaran expects a tame inflation trend, helped by ongoing tax cuts on food and essentials. With retail inflation sitting at a low 2.07% in August, the outlook looks promising. So, India’s economy is gearing up for a colorful boom, all thanks to GST 2.0’s magic mix of reforms, tax relief, and investor confidence. Watch this space for some serious economic fireworks!

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Tags: Gst 2.0, India gdp growth, Anantha nageswaran, Fdi, Tariffs, Fiscal deficit,