"Chidambaram criticizes GST reforms, labeling them as arriving eight years too late, citing disregard for his appeals"
The GST Council, a body responsible for making decisions on Goods and Services Tax (GST) in India, announced a series of reforms and rate cuts after their meeting on Wednesday in 2025. The new GST reforms are expected to benefit households, farmers, businesses, and the healthcare sector.
Finance Minister Nirmala Sitharaman described the new changes as a "Diwali gift to the nation". The two-tier rate structure of 5% and 18%, effective from September 22, was cleared in the meeting. This decision was taken unanimously, as Sitharaman stated.
Former Finance Minister P Chidambaram, a member of the Congress party and currently a Rajya Sabha MP, has reacted to the GST rationalisation and rate cuts announced by the Centre. Chidambaram welcomed the decision but expressed disappointment that it took 8 years.
Factors likely include economic slowdown, revenue shortfalls, inflation control, and the need to stimulate growth and ease business burdens, which led the Modi government to revise GST rates. Chidambaram, however, believes that the existing design and rates of GST should not have been introduced in the first place.
Chidambaram also speculated on what may have pushed the government to revise GST rates at this juncture. He asked if sluggish growth, rising household debt, falling household savings, elections in Bihar, or Trump's tariffs could be the reasons for the GST rate changes.
The GST Council welcomed the new GST reforms by all the states. The rationalisation of GST rates is expected to cause a revenue loss of Rs 48,000 crore. Despite this, Chidambaram stated that the Modi-led Central government did not heed to the Congress's warnings and suggestions on GST reforms.
It is worth noting that Chidambaram made these comments in a post on X (formerly Twitter). The GST council meeting took place in 2025. The new GST rate changes will take effect from September 22, 2025.
The new GST reforms are expected to bring relief to many sectors, with the benefits extending to households, farmers, businesses, and the healthcare sector. However, it remains to be seen how these changes will impact the economy in the long run.
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