Prime Minister Narendra Modi has described 2025 as India’s Year of Reforms, highlighting a series of big changes in taxes, labour laws, trade, energy, and more. In a post on X (formerly Twitter), he pointed out how these steps have helped simplify rules, give relief to people, and push the economy forward. The year saw strong growth, with GDP rising 8.2% in the second quarter of FY26, record foreign investment coming in, and new trade deals signed. While many welcome these moves for making life easier and creating jobs, some opposition leaders have raised questions about how certain changes affect workers and government funds.
Tax Reforms Bring Big Relief
One of the main highlights was changes in taxes. The government simplified the Goods and Services Tax (GST) to what many call GST 2.0. Earlier, GST had multiple slabs like 5%, 12%, 18%, and 28%. Now, most items fall under just two main rates: 5% for everyday things and 18% for others, with 40% kept only for luxury or harmful goods like tobacco.
This made many items cheaper, from household goods and medicines to farm tools and electronics. Essentials like milk, bread, and some foods became tax-free or very low-tax. The aim was to reduce prices for common people, help small businesses, and cut confusion in filing taxes. Many say this boosted spending during festivals and helped middle-class families save money.
On income tax, the new rules set zero tax for income up to ₹12 lakh a year under the new regime. For salaried people, this goes even higher with standard deductions. This replaced the old 1961 Income Tax Act with a simpler one, reducing old complications and court cases. People with middle incomes now have more money in hand, which helps daily life and spending.
Labour Codes Give More Benefits to Workers
The four labour codes, which replaced many old laws, started fully working in 2025. These codes cover wages, social security, industrial relations, and safety at work. Key changes include better rules for gig workers—like those in delivery or app-based jobs—who now get social security benefits, including gratuity after some time.
Fixed-term workers can get gratuity after just one year instead of five. All workers, including contract ones, get equal pay, health checks, and other protections. Aggregators (like app companies) must add 1-2% of their turnover for worker funds. The codes also make it easier for women to work night shifts with safety measures and aim to bring more people, especially women, into formal jobs.
The government says these changes cut old paperwork by a lot, help create more jobs, and give dignity to workers. Some experts feel this will grow the formal workforce and support youth and women.
Energy Sector Opens Up with SHANTI Bill
In energy, Parliament passed the SHANTI Bill (Sustainable Harnessing and Advancement of Nuclear Energy for Transforming India). This law updates old rules from 1962 and allows private companies to join in building and running nuclear power plants for the first time. The government keeps control over sensitive parts like fuel and weapons, but private players can bring in money and new technology.
This helps India reach its goal of 100 GW nuclear power by 2047 for clean energy. It fits the push for more power without pollution and supports industries like AI and manufacturing that need steady electricity.
Trade Deals Boost Exports and Jobs
India signed new free trade agreements (FTAs) with countries like the UK, Oman, and others in 2025. These deals cut taxes on goods, make it easier to export things like textiles, food, and services, and bring in more investment. With the UK and Oman, Indian workers get better chances to work there, and exports get a big push.
Combined with strong foreign direct investment (FDI) inflows, these helped India hit record export numbers and grow trade. The government says this makes India more connected globally and helps farmers, small firms, and youth find better markets.
Strong Economy and Security Steps
The economy showed power with 8.2% GDP growth in Q2 FY26, driven by manufacturing, services, and spending. This beat many expectations and showed reforms are working despite world problems.
On security, after a deadly terror attack in May 2025, India carried out Operation Sindoor. This was a targeted strike on terror camps across the border to stop attacks from happening again. It set a clear message on dealing with terror firmly while keeping calm. Many praised it for showing India’s strength and resolve.
Opposition Concerns
While the government calls 2025 a year of big progress, some opposition voices worry about a few things. They say some labour changes might make hiring and firing easier for companies, which could affect job security. Others question if tax cuts reduce government money for welfare or if private entry in nuclear brings safety risks. The government replies that all changes follow careful rules and aim to help everyone grow together.
Prime Minister Modi said on X that India has “boarded the Reform Express” in 2025, with these steps adding speed to the journey toward a developed India. Many leaders and experts agree that these reforms focus on simple rules, more jobs, and strong growth for the future.
FAQs
Q1: What does ‘Year of Reforms’ mean in 2025?
A: Prime Minister Modi called 2025 India’s Year of Reforms because of major changes in taxes, labour, energy, trade, and rules. These aim to make life easier, cut old problems, attract money, and grow the economy fast.
Q2: How has GST changed in 2025?
A: GST now mostly has two slabs: 5% for daily needs and 18% for most items. Luxury or sin goods get 40%. Many things like food, medicines, and tools became cheaper or tax-free. This helps common people save money and businesses file taxes easily.
Q3: What benefits do gig workers get from labour codes?
A: Gig workers now get social security like health cover and gratuity. App companies add money to a fund for them. All workers get portable benefits through Aadhaar-linked numbers, so they don’t lose gains when changing jobs.
Q4: Why was the SHANTI Bill important?
A: It opens nuclear power to private companies for building plants. This brings new technology and funds to make more clean energy. India aims for big nuclear growth by 2047, and this helps without losing government control on key safety parts.
Q5: Did these reforms help the economy grow?
A: Yes, GDP grew 8.2% in Q2 FY26, one of the highest rates. More FDI came in, exports rose with new FTAs, and people had more money to spend due to tax relief. Many say this sets India up for long-term strong growth.
Q6: What was Operation Sindoor?
A: In May 2025, after a terror attack killed many, India did targeted strikes on terror camps in response. It showed strong action against terror while staying measured to avoid bigger fights.
Q7: Are there any worries about these changes?
A: Some say labour rules might reduce job protection or that private nuclear entry needs strong checks for safety. Tax cuts could mean less money for some government schemes. But the government says rules protect everyone and growth will help all.
Q8: What comes next after 2025 reforms?
A: The government plans more steps like customs changes and digital help for business. The focus stays on making India easier to live and do business in, aiming for a developed nation soon.