GST 2.0 and Tax Reforms to Propel India's Economic Surge

India's Chief Economic Advisor, V Anantha Nageswaran, has projected that the recently enacted GST 2.0 reforms and income tax relief measures, as announced in the Union Budget, will significantly boost economic growth. He expects the growth in fiscal year 2026 to touch the upper end of the 6.3-6.8% range.

Speaking at the Network18 Reforms Reloaded 2025 summit, Nageswaran emphasized the substantial impact of these reforms on domestic demand. The combination of direct tax cuts and indirect tax reliefs is estimated to contribute over Rs 2.5 lakh crore to the economy, despite potential uncertainties. Historical data indicates state collections have risen post-GST rate cuts, he noted.

Nageswaran also reassured that India remains on track to achieve a fiscal deficit target of 4.4% of GDP for FY26. He cited robust non-tax revenue growth and resilient festival season activity to support this outlook. Despite US tariff impacts, GST reforms are expected to cushion potential setbacks, ensuring steady growth.