Says India will keep buying Russian oil
Finance Minister Nirmala Sitharaman said on Friday that GST rate cut would spur growth in the economy which would offset the drag due to the adverse impact of the US tariff hike on Indian exports. She also said that India would continue to buy Russian oil because of economic considerations as crude was the costliest item in the country’s import bill.
The government’s main focus would now be on ensuring that GST rate cuts on various goods and services, that will kick in from Sept 22, are passed on to consumers, Sitharaman said in a media interview.
“We have a lot of work post-22nd September. It is a big vigilance exercise and we are confident the benefits will reach the common man,” she noted.
Sitharaman also said the government was speaking to different stakeholders and parties to monitor rate reduction and all industry leaders were on board for lowering prices on goods to pass on the benefit of the GST rate cut to consumers.
“After the GST Council’s decision to cut GST rates, MPs are also taking up the responsibility of monitoring the rate reduction on the ground,” she said.
On the issue of western pressure on India to stop buying oil from Russia, FM said the government’s purchases of oil were based on economic considerations such as the price and logistics costs. She pointed out that “since oil is a big ticket foreign exchange-related item and the costliest item in India’s import bill, we will undoubtedly be buying Russian oil.” On the impact of the USA’s 50 per cent punitive tariff on the Indian economy, FM said that the cut in GST rates would drive up domestic demand and spur growth which would offset the adverse impact on exports. She also said that the government would come out with measures to support those who have been hit by the tariff hike.
Sitharaman also mentioned that Prime Minister Narendra Modi had contacted her eight months ago to explore ways of revamping the GST framework.
PM Modi had emphasised the need to simplify the system with a strong focus on easing the burden for the middle class, she added.
She further explained that GST 2.0 has been designed to minimise disputes and ensure clarity for both businesses and states.
GST reforms will cause Rs 3,700 cr revenue loss to govt, says SBI report
PTI: State Bank of India (SBI) in its latest research report said that reforms in GST through reduction in rates will cause a minimal revenue loss of Rs 3,700 crore. The government estimates the net fiscal impact of GST rates rationalisation will be Rs 48,000 crore on an annualised basis.
According to the report, given the growth and consumption boost, the minimal revenue loss is estimated at Rs 3,700 crore and will have no impact on the fiscal deficit. The report said that the GST rate rationalisation will largely have a positive impact on the banking sector due to meaningful cost efficiencies.
GST rate rationalisation has also brought down the effective weighted average rate from 14.4% at the time of inception in 2017, which is expected to come down to 9.5%, the report said. Since the GST rate rationalisation of essential items (around 295) has declined from 12% to five% or zero, the CPI inflation in the category may also come down by 25 basis points to 30 basis points in the current financial year, the report said.
Overall, CPI inflation may be moderated in the range of 65 basis points to 75 basis points over 2026-27.