Over time, GST reforms will lower rates and boost consumption, says Prashant Kumar of Yes Bank

The introduction of Goods and Services Tax (GST) 2.0, featuring a simplified two-slab structure at 5% and 18%, marks a significant reform for the consumer industry and the wider economy. By eliminating the 12% and 28% rates, the government has streamlined the tax system, encouraged better compliance, and established a more stable and predictable tax environment for freight operators.

Prashant Kumar, MD & CEO of Yes Bank, told Fortune India that the rationalisation of the GST structure has been a long-awaited reform. "Over time—not immediately, but gradually—this rationalisation should lead to lower rates, which will naturally help boost consumption. The recent reduction in income tax rates also means individuals will have more disposable income, further supporting demand," he added.

Kumar also noted that on the rise in personal loans and the fall in household savings, what we are seeing across the industry is that delinquencies in personal loans, especially those underwritten in the past six to nine months, are actually stabilising and even improving. Banks have become more cautious about who they onboard and the type of underwriting practices they follow, which has improved credit quality.

"There are also behavioural factors at play. Retail participation in the F&O market and in online cash games led to significant losses for many individuals, and in some cases, people turned to unsecured loans or credit cards to fund these activities. But with greater awareness and stricter underwriting by banks, the sector is now much more cautious, and we hope not to see the kind of credit quality issues that surfaced in the past,” he said.

The Union Ministry of Finance has highlighted that consumers can lodge complaints about the new GST prices not being passed on via the national consumer helpline. "You can call the toll-free number 1915 or use WhatsApp at 8800001915. Additionally, complaints or queries can be submitted through the Integrated Grievance Redressal Mechanism (INGRAM) portal," the ministry stated in the FAQ.