Simplifying Taxes or Skewing Facts? The Missing Pieces in Modi’s GST Speech

India’s Prime Minister Narendra Modi’s recent address to the nation on September 21, 2025, focusing on new GST reforms, has sparked significant criticism across the political spectrum. While hailed by his supporters as a milestone in simplifying India’s tax regime, opposition leaders and analysts argue the speech was marked by problematic omissions and overstated claims, ultimately weakening public trust in government accountability.

Undue Credit and Lack of Collaborative Acknowledgment

One of the most conspicuous criticisms centers around Modi’s claim of sole ownership of the GST reform initiative. Opposition leaders, including Mamata Banerjee and Kunal Ghosh, have emphatically pointed out that states like West Bengal played a crucial and proactive role in pushing for the lowering of GST rates. Their collective pressure was a key catalyst compelling the central government to act. To assert that the Centre alone delivered the reform overlooks the substantial negotiating and lobbying efforts by several states representing diverse economic interests.

Mamata Banerjee has publicly criticized the narrative as unfair, emphasizing that it dismisses the role of regional governments who bore the brunt of the GST complexities and fiscal losses for years. Kunal Ghosh, further underscoring this point, has urged recognition of the fact that GST, from its introduction in 2017, was marred by imbalanced structures and rates harmful to states’ financial autonomy. These leaders argue that the Modi government’s approach creates a skewed historical record that undermines the spirit of cooperative federalism.

Adequacy of Reforms: A Band-Aid Fix for Earlier Failures

Critics from the Congress and related parties consider the announced GST reforms as insufficient and overdue. The GST regime since 2017, they say, has been punitive to common citizens, especially with its high tax burden on essential goods such as grains, medicines, and local produce. Congress President Mallikarjun Kharge described the changes as a “band-aid fix” that came too late to relieve the everyday struggles caused by the original GST structure.

This critique is tied closely to the demand for a formal apology from the government for the economic hardships imposed on millions over the last several years. The reforms—which include pruning tax slabs—are seen not as visionary tax policy but as reactive damage control designed to regain political goodwill ahead of upcoming electoral cycles.

Impact on State Revenues and Fiscal Concerns

Another concern voiced by state leaders and multiple opposition groups is the revenue loss stemming from the GST cuts. States claim that the lowered GST slabs, particularly the elimination of various intermediate tax rates, will lead to substantial shortfalls in their fiscal budgets, which may delay public spending on key welfare and infrastructure programs. Many accuse the Centre of prematurely touting success without clearly addressing compensatory mechanisms for states, thus exposing regional governments to financial strain.

This omission, critics warn, threatens to exacerbate tensions between the Centre and states and hamper the progress of balanced regional development. Declining state revenues could risk the very economic stability that the reforms intend to bolster.

Weakening Public Trust by Sidestepping Critical National and Global Issues

Beyond fiscal policy, a significant portion of public and political disappointment stems from the speech’s failure to engage with wider pressing concerns. Notably absent were substantive discussions on ongoing trade tensions, especially US-imposed tariffs on Indian goods, which affect exports and the broader economy. Similarly, emerging challenges related to H-1B visa restrictions and other international economic frictions were sidelined.

This lack of broader vision reinforces perceptions among citizens and analysts that the government is avoiding tough or inconvenient topics, instead choosing to highlight politically palatable reforms. Such selective communication risks eroding public confidence, as citizens perceive a disconnect between government rhetoric and the complex realities of India’s economic and foreign policy challenges.

Regional Disparities and Perceived Inequities

The speech also failed to address growing concerns about uneven GST application affecting various regional economies. Critics cite examples such as the disparity in GST rates on local products like Bihar’s Makhana, which remains taxed higher compared to comparable items in Gujarat, Modi’s home state. Such inconsistencies fuel perceptions of favoritism and uneven economic treatment, undercutting the principle of equal opportunity and fairness that tax reforms should uphold.

Conclusion

While Prime Minister Modi’s address showcased steps toward a simplified GST regime, the political and fiscal context reveals significant cracks beneath the surface. Opposition voices raise legitimate concerns about overstated claims of credit, inadequately addressed hardships from the original GST rollout, fiscal pressures on states, and the absence of critical national and global economic issues from the conversation. Together, these factors threaten to weaken public trust in the government’s policy narrative and call for a more inclusive and transparent approach to reform communication going forward.

The speech ultimately highlights that tax reform, to be truly effective and credible, must be collaborative, comprehensive, and aligned with both the nation’s economic realities and the expectations of India’s diverse federated states. Without this, public faith risks erosion at a time when cooperative governance is crucial for sustained growth and social equity.