GST Reforms Aimed at Empowering MSMEs

In September 2025, the government announced a series of GST rationalizations specifically designed to ease the burden on micro, small and medium enterprises (MSMEs). These reforms reduce tax rates on a swath of intermediate and consumption goods to lower costs and simplify compliance. The goal is to boost local manufacturing, generate jobs (especially in rural and semi-urban areas), and strengthen India’s supply chains. Finance Ministry officials explained that the changes follow feedback from industry and are part of the ongoing NextGen-GST process.

Major highlights of the GST changes include:

• Automobiles & Transport Equipment: GST on certain vehicle parts and bodies has been lowered from 28% to 18%. For example, electric and petroleum-powered passenger vehicles (capacity >13 seats) and larger buses now attract 28% instead of 43% (including cess). Trucks, trailers and chassis have had their tax cut, making transport fleet upgrades cheaper.

• Food Processing & Dairy: To help farmers and small food units, many food items saw tax cuts. Fresh milk, curd and whey were shifted from 12% to 5% (same as bottled water). Eggs’ GST dropped from 12% to 5%. Items like tomato puree, peanut oil, buffalo and camel milk were fully exempted. These cuts help dairy cooperatives, bakeries, and snack manufacturers.

• Handicrafts, Textiles & Leather: The exemption threshold for handloom and handicraft articles was raised to ₹2,500 (from ₹1,000) per item, which reduces paperwork for artisans. Handloom fabrics and pre-woven yarn remain at 5%. Textile accessories and handicraft supplies also saw lower slabs. Handicraft tools (e.g. looms) were moved to a lower bracket. This means weavers and craft workers keep more of their income. Leather goods (footwear below ₹2,500) saw GST cut to 5% from 12%.

• Building Materials: Cement and building bricks were moved from 28% to 18%, aligning them with housing status. This is expected to reduce construction costs for rural housing schemes. Similarly, GST on sanitaryware and ceramic tiles was cut to 18% to support the rural housing sector.

• Packaging & Other Inputs: Taxes on items like tetra packs, labelling machines, wooden skewers, and cellulose (used in packaging and food prep) were trimmed to 18% from 28%. Equipment for polybags and pressing garments also saw reductions. These changes help small food processors and packaging units to reduce wastage and cost.

• Logistics & Support Services: The GST on inland waterways transport (IWT) was brought in line with rail (no GST up to a threshold). This promotes cheaper movement of bulk goods. Simplifications like these are meant to ease supply chains.

In essence, the GST cuts give a significant tax break to everyday goods and raw materials used by MSMEs. Policy analysts note that the reduced GST rates (from 28% to 18% on many items) align with budgetary support the MSME sector. They say the move will shrink the informal sector and widen the tax base in the long run by making more businesses formally compliant. Industry leaders have welcomed the changes, predicting a boost in rural manufacturing and a slowdown in inflation. In particular, exporters of textiles, handicrafts and agriculture goods should see improved competitiveness. The government expects these GST reforms to generate additional employment and strengthen the ‘Make in India’ campaign by supporting cottage industries and local entrepreneurship.

Central Team Reviews Himachal Pradesh Flood Damage

A Central government team led by Union Minister of State Savitri Thakur (Women & Child Development) conducted an on-site survey of flood- and landslide-affected areas in Himachal Pradesh. The delegation visited Kullu and Manali districts, which have recently suffered severe flash floods. They reviewed damage on key routes (Manali–Kullu highway, Ropa–Ghatu–Kullu road) and met with affected residents. The MoS directed officials to accelerate repair of collapsed roads and bridges. She emphasized that the central and state governments will work together on a “war footing” to restore connectivity and provide relief.

During the visit, Minister Thakur inspected sites such as:

• Damaged Road Sections: Nallah breaches and road collapses along the Beas River (e.g. near Kullu). She noted where torrents had washed away road embankments.

• Strategic Infrastructure: Landslide-hit tunnels (Ghutaru Tunnel) and bridges on NH-3 (now NH-205). These are being rehabilitated by NHAI under emergency procedures.

• Relief Camps & Supplies: The team observed relief distribution points and temporary shelters, ensuring that food, medical aid and financial assistance are reaching survivors. Welfare officers confirmed that help is being sent via the SDRF, Army and air-dropping equipment to cut-off villages.

• Risk Zones: Villages such as Kothi Khera and Manikaran – near flash-flood sites – were visited to assess the impact of cloudbursts. The minister inquired about early warning systems and asked if final evacuation plans were in place before monsoon peak.

According to official reports, recent monsoon cloudbursts dumped several hundred millimeters of rain in a few hours, triggering floods that washed away roads and a temple stairway. Rescue and relief efforts have been sizable: National Disaster Response Force (NDRF) teams have been deployed, state SDRF and armed forces used earthmovers to clear debris, and local administrations set up relief camps. In her interactions, the Minister conveyed the government’s commitment to provide all needed funds under the State Disaster Response Fund (SDRF) and National Disaster Relief Fund (NDRF). She said the Centre is monitoring the situation closely and will sanction expedited fund releases for permanent reconstruction.

Experts say these areas of Himachal require more resilient infrastructure – for example, storm-resistant bridges and robust monitoring of hill slopes – as monsoon cloudbursts grow more frequent due to climate change. The Minister’s inspection highlights the government’s policy of “live to learn” by field visits, which ensures prompt inter-agency coordination. The hope is that fast remediation work, combined with disaster-resilient planning (such as community training and improved forecasting), will mitigate future flood risks in the Himalayan states.