inance Minister Nirmala Sitharaman on Saturday announced that Goods and Services Tax (GST) rates will be further reduced, with the process of rationalising tax rates and slabs nearing completion.
Speaking at The Economic Times Awards, Sitharaman highlighted that the revenue neutral rate (RNR) has already declined from 15.8% at the time of GST’s rollout in 2017 to 11.4% in 2023. “It will come down even further,” she assured.
The GST Council, chaired by Sitharaman and including finance ministers from various states, had set up a Group of Ministers (GoM) in September 2021 to recommend changes to tax slabs. The GoM, comprising six state finance ministers, has conducted extensive reviews on the matter.
Sitharaman indicated that the process is in its final phase. “The groups (GoM) have done excellent work, but I have taken it upon myself to completely review each of their recommendations. Once that is done, we will take it to the Council for a final decision,” she stated.
Further discussions will take place in the next GST Council meeting to address crucial aspects, including rate reductions, slab restructuring and overall rationalisation.
On market volatility and public sector banks
Responding to concerns about stock market fluctuations, Finance Minister Sitharaman attributed volatility to global uncertainties. “It is like asking if the world will be calm, if wars will end, if the Red Sea will be safer, or if there will be no sea pirates. Can anyone comment on it?” she remarked.
On the issue of public sector banks (PSBs) and stake dilution, the Finance Minister reiterated the government’s commitment to increasing public float. “We want more retail investors in public sector banks,” she said.