After GST Cuts, Govt Says It's Industry's Turn to Deliver

Days after implementing deep cuts the tax structure with an aim to spur consumption and boost a slowing economy, Finance Minister Nirmala Sitharaman today made a strong appeal to the industry to do its part by investing more and scaling up production.

The minister said the government has delivered on demands made by the industry over the past decade. 

"I have a basket of things on which government has delivered...I hope there is no more hesitation for industry to invest further, to expand capacities, to produce more in India,” Sitharaman said at the Indian Foundation for Quality Management (IFQM) Symposium 2025 where industry leaders across the automotive, aviation, and auto-component were present. 

To boost demand, the GST Council announced rate cuts on nearly 400 items, including reducing the rate on small cars and two-wheelers to 18% and on tractors to 5%. Luxury cars will continue to be taxed at 40%.

According to a NITI Aayog report, India’s automotive industry accounts for 7.1% of the country’s GDP and 49% of its manufacturing GDP. A few days back, the finance minister said the new GST reforms are expected to inject Rs 2 lakh crore into the economy, putting more cash in people’s hands. 

Pointing out concerns over uncertain demand and global volatility, Sitharaman said the government understands that industries often wait for clear signs of demand before committing to investments. However, she said that the demand horizon continues to shift due to global challenges, and urged industry leaders to reassess this wait-and-watch approach.

Sitharaman highlighted a skill-gap in the industry and asked for more collaboration between the private sector and the government. “The degree in the paper is there. But the individuals are not groomed adequately enough. To be a part of the large multinational...So I would want private sector participation together with government. In readying youth to be fit for quick and direct employment.”

The minister added that many young recruits lack adequate skills upon joining a company, forcing employers to spend six to eight months training them after recruitment. “I have had genuine grievance from industry...you are spending almost six to eight months in getting them ready to be in the positions for which they will be recruited. Those eight months should have been part of what the young man or woman learns. Before they are ready to apply for a job with you.”

Sitharaman also highlighted the importance of continuous engagement between industry and government beyond pre-budget talks. “Engagement with government should be ongoing. It should not be just before budget. Come and say a list of things and disappear. Please keep it going on. We are all here to hear you. And we respond.”