The GST Council’s decision to move to a two-rate structure of 5% and 18% from September 22 is a landmark shift, but more must follow to strengthen India’s growth trajectory, said EY India Chairman Rajiv Memani.He stressed that beyond tax rationalisation, reforms in ease of doing business and the power sector are crucial. “The government has been actively engaging with states and benchmarking approvals on land, labour and environment. Willing states that adopt changes quickly will become significantly more competitive,” Memani said.
Highlighting power as a priority, he added that India cannot sustain 50-60% cross-subsidisation on industrial tariffs. “Reducing power costs through privatisation or second licences will be key to boosting competitiveness and supporting manufacturing,” he noted.
On GST 2.0, Memani called it a “refresh” that fixes structural issues such as multiple slabs, inverted duty structures and e-commerce registrations. He said the reform could put nearly ₹1 lakh crore into consumers’ hands, creating a virtuous cycle of higher demand, better capacity utilisation and stronger capex spending.The rollout comes ahead of the festive season, providing a timely consumption boost. Memani said he expected the benefits to flow from the last quarter of 2025 to early next year. “This is hopefully the first in a sequence of reforms that augurs well for GDP growth and India’s economic resilience,” he said.Watch accompanying video for entire conversation.(Edited by : Shoma Bhattacharjee)
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