New Delhi, Sep 21 (PTI) A day before reduced GST rates come into effect, Prime Minister Narendra Modi on Sunday made a strong pitch for promoting 'swadeshi' goods and asserted that the next generation GST reforms will accelerate India's growth story, increase ease of doing business and attract more investors.

In his address to the nation, Modi said a 'GST bachat utsav (savings festival)' will begin from the first day of Navratri, and coupled with the income tax exemption, it will be a "double bonanza" for most of the people.

PM Modi stressed all states will be equal stakeholders in the development race and urged them to give pace to manufacturing with 'Atmanirbhar Bharat' and swadeshi campaigns in mind.

"On the first day of Navratri, the country is going to take an important and big step for Atmanirbhar Bharat. With the sunrise tomorrow, the next generation GST reforms will come into effect. A 'GST bachat utsav (savings festival)' will begin tomorrow.

"You will be able to buy things you like more easily. The poor, middle class, neo middle class, youths, farmers, women, traders and shopkeepers will benefit from this," he said.

In this season of festivals, everyone's happiness will increase, Modi said.

He congratulated all on the next generation GST reforms. "These reforms will accelerate India's growth story, increase ease of doing business and attract more investors," Modi said.

When India took a step towards GST reforms in 2017, a new beginning was made to script history, he said.

He said GST realised the 'one nation-one tax' dream. Modi highlighted how the web of taxes and tolls had created hardships for businesses and consumers.

Citing income tax exemption on earnings up to Rs 12 lakh and GST reforms, he said it is a "double bonanza" for the poor, neo-middle class, and middle class.

He also said the GST move would benefit MSMEs big time.

Prime Minister Modi urged the people of the country to take pride in selling and buying indigenous goods.

The way the country's independence got strengthened by the Swadeshi movement, similarly, India's prosperity will be empowered by the mantra of 'swadeshi', he said.

From kitchen staples to electronics, from medicines and equipment to automobiles, goods and services will be cheaper from Monday as the reduced GST rates on about 375 items come into effect.

In a bonanza to consumers, the GST Council, comprising the Centre and states, had decided to reduce the tax rates on goods and services, from September 22 -- the first day of the Navaratri.

The GST will now be a two-tier structure wherein the majority of goods and services will attract tax of 5 and 18 per cent. A 40 per cent tax will be levied on ultra luxury items, while tobacco and related products will continue to be in the 28 per cent plus cess category.

Till now, Goods and Services Tax (GST) was levied in 4 slabs of 5, 12, 18 and 28 per cent. Besides, a compensation cess is levied on luxury items and demerit or sin goods.

Mass consumption items like ghee, paneer, butter, 'namkeen', ketchup, jam, dry fruits, coffee and ice creams, and aspirational goods like TV, AC and washing machines will become cheaper. PTI ASK/KR RT RT

GST reforms: reduced multi slab structure to two tier system, lowering consumer and MSME taxes and boosting domestic manufacturing. Next generation GST reforms take effect with reduced tax rates on a broad list of consumer and aspirational goods, moving from a multi slab regime to a predominant two tier structure that lowers taxes for most goods and services while retaining higher rates and cess for ultra luxury and tobacco items. The reforms are promoted as simplifying taxation, reducing retail prices, aiding MSMEs, increasing ease of doing business, and supporting domestic manufacturing under swadeshi and Atmanirbhar Bharat appeals.