- Prime Minister Modi urged India’s neo-middle class to benefit from GST savings
- GST rate cuts start on 22 September, lowering prices on many consumer goods
- Income up to Rs 12 lakh is now tax-free, aiding the middle and neo-middle class
Prime Minister Narendra Modi called on India's 'neo-middle class' to take advantage of the savings on consumer goods due to the reduction in Goods and Services Tax.
"Having emerged from poverty, a large group of 25 crore people, known as the neo-middle class, is playing a significant role in the country today. This neo-middle class has its own aspirations and dreams," PM Modi said during his televised address to the nation on Sunday.
His speech came on the eve of Navratri. The GST rate cuts will kick in from Monday, Sept. 22, with the prices of a large number of consumer products set to come down.
"This year, the government presented a gift by making income up to Rs 12 lakh tax-free and naturally, when income tax relief up to Rs 12 lakh is granted, the lives of the middle class undergo a profound transformation, bringing about so much simplicity and convenience...Now, the poor, the neo-middle class, and the middle class are receiving a double bonanza. With the reduction in GST, it will be easier for the citizens of the country to fulfil their dreams," the PM said.
#WATCH | Prime Minister Narendra Modi says, "In the last eleven years, 25 crore people in the country have defeated poverty. Having emerged from poverty, a large group of 25 crore people, known as the neo-middle class, is playing a significant role in the country today. This… pic.twitter.com/jggGEJEt9S
September 21, 2025The PM underscored that with lower GST rates, fulfilling personal dreams will become easier for citizens, whether it's building a house, purchasing a TV or refrigerator, or buying a scooter, bike, or car, all will now cost less. He added that travel will also become more affordable, as GST on most hotel rooms has been reduced.
Who Are The Neo Middle Class
The "Neo-middle class" is a group of people who have recently come out of poverty but aren't yet financially secure. They earn just enough to be above the poverty line but are still very vulnerable to economic setbacks.
Neo-middle class are characterised by a desire for a better lifestyle and are willing to spend more on products and services to achieve it, even if they are cautious about the cost. They rely on digital technology, likely for things like access to information, job opportunities, education, or entertainment.
Drawn to the opportunities and living standards of urban areas, they are the first in their families to move up the economic ladder, with their success due to increased access to education, jobs, and government support programs. While they are willing to spend a bit extra for better products or services, they are often hesitant about big purchases. This class is considered an important pillar of global economic activity as they play an important role in shaping consumer trends and stimulating economic growth.
PM Modi said the GST reforms marks the beginning of a 'GST Bachat Utsav' (Savings Festival) across India. He emphasised that this festival will enhance savings and make it easier for people to purchase their preferred items.
Modi noted that the benefits of this savings festival will reach the poor, middle class, neo-middle class, youth, farmers, women, shopkeepers, traders, and entrepreneurs alike.
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