Bulletin RBI: The Reserve Bank of India (RBI) has said in its November Bulletin that fiscal, monetary and regulatory measures are creating a favorable environment for increased private investment in India, which will accelerate economic growth in the coming years. In the article titled ‘State of the Economy’, it has been told that despite global uncertainties, the Indian economy is continuously showing signs of strength.

Strength in Indian economy

High-frequency indicators for the month of October—such as PMI, GST collections, electricity consumption and e-way bills—point to strength in both the manufacturing and services sectors, with festive demand and GST reforms playing a key role. According to the report, inflation is at historically low levels and remains well below target, while financial conditions are also favorable and resource flows are stable.

Despite uncertainties in global trade policies and external challenges, India’s economy is becoming stronger with time, thanks to strong services exports, rising remittances, cheap crude oil and increasing share of renewable energy.

Private investment will get a boost

The current account deficit also remained limited in proportion to GDP in the first quarter of the financial year 2025–26. The bulletin said that the improved macroeconomic framework has enhanced the efficiency of financial institutions and helped the RBI to further streamline financial intermediation and credit flows.

The article also mentions that policy steps taken this year will bring long-term economic strength through increased private investment and productivity. However, concerns remain about the sustainability of the euphoria in global stock markets and its impact on financial stability. RBI has clarified that the views published in the bulletin are personal to the authors and should not be linked to the official views of the bank.

SBI Research Report on GST: GST 2.0 was announced amidst the ongoing trade tariff tension with the US. It is being said that due to extensive changes in GST rates, tax rates on essential household goods and services will be reduced. In addition, it can help reduce retail inflation from 0.65% to 0.75% in the next financial year. On Thursday, SBI Research said that in the 56th meeting of the GST Council on Wednesday, two tax slabs of 5% and 18% have been approved instead of the current four -level tax rate structure.

What is going to happen?
In addition, a special rate of 40% has been fixed for some luxury and harmful goods and services. The new tax rates will be effective from 22 September except tobacco and related products. The SBI report further stated that out of the 453 items which were changed in GST rates, 413 items were seen to be seen to be seen, while only 40 items were seen to be increased. About 295 items now apply 5 percent or 0 GST rate instead of 12 percent.

Since the GST rate of essential commodities (about 295 items) has come down from 12% to 5% or 0, the consumer price index-based inflation in this category can also be reduced by 0.25 to 0.30 percent in FY 2025-26, keeping in mind the effect of getting 60% of customers on food items.

Why can inflation be reduced?

If you believe in SBI Research Report, then rationalization of GST rates on services will reduce retail inflation on other goods and services from 0.40 to 0.45%. In this, customers have been estimated to get 50% benefits.

According to the report, retail inflation may decrease from 0.65 to 0.75% during the financial year 2026-27. The effective weight average GST rate has come down to 11.6 percent in September 2019, which was 14.4 percent in the beginning, with the GST Council rationalized by the GST Council. According to the report, in view of the current change in rates, the effective weight average GST rate can be reduced to 9.5 percent.

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A historic decision was taken at the 56th GST Council meeting, under which 12% and 28% tax slab has been abolished. Now only two slabs – 5% and 18% will remain. On this matter, Finance Minister Nirmala Sitharaman said that this change will bring relief for common families, farmers, businesses and health sector. He called it the GST improvement of the next generation and the gift of Diwali for the country.

Congress leader and Rajya Sabha MP P Chidambaram has reacted to the government’s decision. He welcomed it, but also criticized strictly. He wrote on X (East Twitter) that rationalizing GST and decreasing rates on many things and services has been welcome, but this decision has been taken with a delay of 8 years. This existing form and tax slab should not have been implemented from the beginning. We were constantly warning while in opposition, but our arguments were ignored.

The GST Rationalization and the Reduction in Rates on a range of goods and services are welcome but 8 years too late

The current design of gst and the rates previving until today

We have been crying hoorse for the last 8…

– P. chidambaram (@pchidambaram_in) September 3, 2025

P Chidambaram raised questions
Congress leader and Rajya Sabha MP P Chidambaram questioned why this reform was still done. He speculated the political and economic reasons behind this. He questioned whether this decision has been taken under the pressure of sluggish economic development, increasing domestic debt, decreasing savings, upcoming Bihar elections or American tariffs. All these factors can be forced to force the government.
TMC surrounds the government
The All India Trinamool Congress (TMC) also attacked the central government and called this decision a victory for the public. The TMC said that taxing the insurance premium was cruel and anti -people. Mamta Banerjee opposed this from the beginning. However, this decision proves that the BJP government listens only when it is under pressure. The TMC warned that it will continue to fight against every such anti -people decision between Parliament, Road and the public.

Economic and political impact
Cutting in GST rates will provide relief to consumers and reduce the cost of living. The industry will get a chance to increase sales and production. There will also be pressure on the government that further decisions should be taken in time and transparent manner.

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Next gen gst reforms: PM Modi made a big announcement of GST reform in his speech from the Red Fort on the occasion of Independence Day. It is expected to be implemented across the country before Diwali in the festive season to speed up the economy amidst a shock from American tariffs. Its purpose is to improve tax structure as well as reduce the tax burden on businessmen and people.

PM Modi has also indicated in his speech that tax and prices will be cut from above everyday needs. At present, GST has five slabs, of which 0 percent, 5 percent, 12 percent, 18 percent and maximum 28 percent. But the government now wants to bring it into only 2 slabs. While the cess can be eliminated from above the salmon. This will provide considerable relief to local sellers, MMMEs and consumers.

PTI has quoted government sources as saying that 90 percent of the 28 percent of the slabs will be brought inside the slab of 18 percent. Whereas all 12 percent GST will be shifted to 5 percent.

These things will increase the price

While the government wants to keep two slabs of GST, it wants to increase the rates of GST to 40 percent on luxury and harmful goods. These will include Paan Pashla, cigarette, tobacco, luxury car, SUP and online gaming.

The Indian Express has quoted sources as saying that keeping in mind the social values, the revenue department has made category for harmful and luxurious goods, online gaming is fit in it.

What should happen cheap

1- The products and services on which 12 percent GST charge is currently charged, after going within 5 percent, many essential items such as medicines, processed food and some dairy products as well as hotel rooms and some construction items will be cheaper.
2- The items and services that are charged 28 percent GST, the things that will be cheaper by bringing them under 18 percent include air conditioners, refrigerators and cement. GST cuts are also expected to be cut on the insurance sector.
3- Bringing 28 percent GST within 18 percent will benefit the four-wheelers with a four-wheel vehicles with an engine less than 1200 cc and a two-wheeler less than 500 cc. It is believed that the sale of Maruti Suzuki and Hero Motor Corp may increase further in the coming days.

Significantly, on 1 July 2017 in India, GST was implemented in five slabs for the first time. In this, a tax system was implemented across the country, including all the state governments and tax and central tax.

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