Although the government is expected to lose ₹48,000 crore in tax revenue, this may be the most positive news for India's middle class in years. According to finance influencer Sharan Hegde, the new GST regime, which goes into effect on September 22, is about unlocking spending power rather than raising revenue.

Key Highlights

• GST 2.0 reforms may return ₹48,000 crore in fiscal loss back to consumers, boosting spending.
• Finfluencer Sharan Hegde projects up to ₹2 lakh crore in consumption-led economic stimulus.

GST 2.0 streamlines India's indirect tax system from four tiers (5%, 12%, 18%, and 28%) to just two standard rates—5% and 18%, plus a 40% rate reserved for luxury and sin goods. It's the most significant structural tax change since GST's inception in 2017.

Hegde, a former PwC consultant, wrote on LinkedIn that the new regime has the potential to reduce a massive compliance burden on small businesses while also lowering everyday costs for the average Indian.

"Back when I was at PwC, I saw how complex GST compliance killed small businesses," said the analyst.

More importantly, consumers could feel the effects almost immediately. "Imagine your AC bill dropping by 10%. Your car's EMI calculation changes. "Your insurance gets cheaper," Hegde stated.

The projected tax loss of ₹48,000 crore is being repositioned as a stimulus rather than a slippage. Hegde argues that returning money to consumers could result in up to ₹2 lakh crore in increased spending. "More money → More spending → More economic activity → More tax collection," his words read.

Also Read: Revised GST Rates Effective September 22: Key Details

The government is banking on a formula used in economies such as Singapore and New Zealand: lower interest rates, simpler compliance, and increased consumption. According to Hegde, the real gain is economic velocity rather than immediate revenue.