FM Says Taxation Can’t be an Emotional Decision, Hails Simplifying GST for a Robust Economy

The Finance Minister, Nirmala Sitharaman, in an interview, said that the GST structure needs to be very easy to understand and comply with. That is why the government has made the amendments. She said there is no single event that caused this; reforms like these should keep happening regularly. I do not believe in waiting for years to make improvements. If we can do it in two years, we will.

A few days after the Goods and Services Tax (GST) reforms were announced, in a one-hour-long interview with Business Standard at her office in North Block on Saturday, the finance minister, Nirmala Sitharaman, discussed at length a range of problems or issues faced in the GST structure. Here we have highlighted some of the key questions asked in interviews by Asit Ranjan Mishra, Vikas Dhoot, Nivedita Mookerji, and A. K. Bhattacharya:

“What was the economic policy vision behind the big-bang reform? It is coming after the income-tax law changes… So, how do you situate this GST initiative in the larger economic context, both in terms of policy as well as the state of the economy?”

In response to this question, the finance minister stated that the GST has been in effect for a total of eight years since its introduction. Several lessons have been learnt during the course. Unfortunately, COVID got in the way, and the implementation of those lessons got delayed due to the pandemic. It took another year or two after that to get things back to normal. So, if they ignore those two to three COVID-affected years, they have actually improved the GST system within five years of it starting. They did not plan this based on things like U.S. tariffs or any other outside reason. Also, keep in mind our Income Tax Act has been around from 1961 to 2025, so it is not like these reforms are coming too late.

“Are you surprised by the states’ response? There was virtually a quiet acceptance, barring a few noises.”

In answer to this question, the finance minister said she is really happy. As soon as she came out, she realised how important it was. She has even written a personal letter to each of the finance ministers. She truly appreciates that all of us came together and did the right thing. The people of India deserve this. They discussed things; they had their differences, but in the end, they all agreed that this needed to happen. And for that, she is very thankful.

“With the GST rate cuts and income-tax relief before that, are there any early assessments of demand, GDP and inflation impact?”

To answer this question, the finance minister said there was no such trigger point or defining moment when they thought the GST structure should be amended and simplified. It was the same as the way they managed the Insolvency and Bankruptcy Code (IBC). In it, they bring 3-4 changes, because they wanted it to be stronger and more applicable to the needs of the industry. The main reason for this change is that people should have a simpler and more user-friendly tax system. Most importantly, the tax structure should be easy to understand, and following the rules should be simple too. That is why we made these changes. There was no one specific event that caused this; reforms like this should keep happening regularly. I would not wait for decades to make improvements. If it can be done in two years, they will do it.

“GST structure has to become absolutely simple to understand, and compliance has to become simple. Those were the reasons with which we made the changes. There are no trigger points in such things.

Reform has to be a continuous process and I will not wait for decades to get… pic.twitter.com/5SMFYCGZxb

— Nirmala Sitharaman Office (@nsitharamanoffc) September 8, 2025