Analysis of the Impact on Economic Growth of GST1 (2017) and GST2 (2025) in India: A Quantitative  Case Study

Dalia Ignatius

doi:10.9734/sajsse/2025/v22i101179

Research Article Open access CC BY 4.0

Analysis of the Impact on Economic Growth of GST1 (2017) and GST2 (2025) in India: A Quantitative Case Study

Dalia Ignatius

South Asian Journal of Social Studies and Economics · pp. 114–123 · Published 11 Oct 2025

10.9734/sajsse/2025/v22i101179

Abstract

India's Goods and Services Tax (GST), launched in 2017 as GST 1.0, fundamentally transformed the country's indirect tax framework by unifying multiple tax streams. On September 22, 2025, GST 2.0 was implemented, introducing a streamlined two-slab system (5 percent and 18 percent), extensive rate reductions across more than 375 items, and enhanced compliance protocols. This study employs official government data and projections to assess these reforms' structural and economic implications. Results indicate consumer savings of approximately 13 percent on household groceries and highlight potential short-term revenue adjustments. While reforms foster affordability and economic growth, challenges remain in broad sectoral inclusion. Key recommendations include integrating petroleum products into GST and advancing AI-enabled compliance.

Goods and Services Tax (GST) indirect tax reform tax structure simplification tax slab rationalization economic growth fiscal policy tax evasion digital tax compliance

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Dalia Ignatius (2025). Analysis of the Impact on Economic Growth of GST1 (2017) and GST2 (2025) in India: A Quantitative Case Study. South Asian Journal of Social Studies and Economics , 114–123. https://doi.org/10.9734/sajsse/2025/v22i101179

Affiliations

Dalia Ignatius — Department of Economics, Bharathidasan University, Tiruchirappalli, Tamil Nadu, India.

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