GST 2.0 & “Viksit Bharat”: The Role of Next-Generation GST Reforms in Supporting MSMEs and Achieving Inclusive Growth by 2047

Author(s): Rahul Kumar

Abstract:

The introduction of “next-generation” Goods and Services Tax (GST) reforms in September 2025, popularly branded GST 2.0, represents the most significant recalibration of India’s indirect-tax architecture since the tax’s launch in July 2017. Announced by Prime Minister Narendra Modi in his Independence Day address of 15 August 2025 and operationalised through the recommendations of the 56th GST Council meeting, the reforms collapse the earlier four-tier rate structure into a simplified two-slab system of 5 per cent and 18 per cent, supplemented by a 40 per cent demerit rate on luxury and sin goods. This review paper examines the architecture of GST 2.0 and critically assesses its implications for India’s Micro, Small and Medium Enterprises (MSMEs)-a sector contributing roughly 30 per cent of national Gross Domestic Product, over 45 per cent of exports and employment for close to 28 crore persons. Drawing on official government data, industry surveys and contemporary policy analysis, the paper situates these reforms within the overarching national mission of Viksit Bharat @2047. It argues that rate rationalisation, inverted-duty correction, faster refunds and simplified registration collectively strengthen MSME liquidity, competitiveness and formalisation, thereby advancing inclusive growth. The paper also identifies persistent challenges and offers policy recommendations for the reform’s next phase.

keywords:
GST 2.0; Next-Generation GST Reforms; MSMEs; Viksit Bharat 2047; Inclusive Growth; Tax Rationalisation; Indian Economy

Pages: 75-79     |    19 View     |    3 Download