GST 2.0 to cut food prices and boost ease of living, says PM Modi

Prime Minister Narendra Modi has hailed GST 2.0 as a bold reform that will enhance ease of living and business. Taking effect on September 22, the reforms slash tax rates on everyday foods, easing household expenses and boosting MSMEs and farmers

New Delhi: Prime Minister Narendra Modi on Friday highlighted that the latest GST reforms are not just technical changes but bold steps to enhance ease of living, ease of doing business, and ease of investing.

“By lowering rates on everyday foods and packaging, they make groceries more affordable, boost MSMEs, support farmers, and improve India’s global food competitiveness”, PM Modi stated.

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The Prime Minister was responding on X to an article written by Union Minister Chirag Paswan on the GST 2.0 reforms that will kick in on September 22, just ahead of the festive season, to reduce the prices of over 90 per cent goods sold in markets across the country.

“In his Independence Day address, Prime Minister Modi committed to next-generation Goods and Services Tax (GST) reforms by Diwali. From September 22, that promise will show up in grocery bills nationwide. This is the essence of these changes: It’s a relief you can taste,” Union Minister Paswan said in the article.

Ultra-pasteurised milk, packaged paneer, and all common Indian breads are at 0 per cent GST. Most processed foods, including biscuits, namkeens, breakfast cereals, and coffee, are at 5 per cent, with the intent to keep food affordable, provide clearer classification and rate certainty, and allow industries to focus on scale and quality.

Crucially, these changes arrive as India’s food sector enters a historic expansion, driven by rising incomes, urbanisation, and a young, health- and convenience-seeking population, the article further states.

For households, the payoff is immediate. A wide basket at 0 per cent or 5 per cent lowers monthly spend without asking families to compromise on hygiene or nutrition. Lower indirect tax on everyday foods leaves more disposable income each month, where it matters most – the recurring grocery basket. As competition adjusts prices, consumers can expect more choice in fortified, ready-to-cook, and ready-to-eat options that fit modern routines, it further pointed out.

The article states that MSMES and farmers will benefit from the reduction in GST. Food processing ties the incomes of farmers to the nation’s nutrition. Affordable processed foods lift year-round offtake of milk, grains, fruits, and spices, reducing wastage and supporting better price realisation, Chirag Paswan added.