How GST will impact the job market?
Designation : - Managing Director (India & SAARC)
Organization : - Excelity Global, Mumbai
The historic tax reform was rolled out from July 1, is expected to help the formal job sector to attain an annualized growth rate of 10-13 per cent and fuel demand for professionals in various segments of the economy. The uniformity and the reduction in the average tax burden offered by GST will provide a great push to employment creation.
The job market is looking forward to a big boost from the new GST regime and expects over one lakh new employment opportunities, including in specialized areas like taxation, accounting and data analysis. The predictability of cost of products manufactured or services rendered across the country will improve enterprise productivity.
As per the official data from labor ministry, mere 1.55 lakh jobs were created in 2015 and 2.31 lakh in 2016, the lowest levels since the 10 lakh jobs created by the UPA government in 2009.
With the launch of GST, the job market is trying to revive back. GST rollout will boost the hiring across sectors by creating an integrated national market which will boost domestic demand business and drive job creation. It would also lead to a higher output, more employment opportunities, and economic inclusion.
GST is expected to create significant job opportunities as the businesses will need to hire professionals for dedicated GST management, upgradation and reconciliations. Sector - wise, the immediate high - impact segments of GST are expected to be automobiles, logistics, home decor, e-commerce, media and entertainment, cement, IT and ITeS, BFSI, consumer durables, pharma and telecom.
Definitely, GST have some impact on the gains to the State Revenues which requires to have a permanent balance in the economic situation of the country and maintain a comprehensive job market. The predictability of cost of products manufactured or services rendered across the country will improve enterprise productivity which will trigger the expansion of services, capacity and product ranges, resulting in a subsequent increase in manpower requirement.
While all sectors stand to gain from the positive move, the biggest gainer will be labor intensive sectors leading to a substantial raise in formal job creation. It provides a lot more of incentives to all sectors in the economy and invites the corporate houses to start up their businesseswhich will create a balance of growth, boost the overall economic development and sound economic environment which is required for accommodating more jobs in India.
Along with the rollout of GST on July 1, The Ministry of Skill Development and Entrepreneurship (MSDE) has launched a 100-hour certificate course, to equip the candidates with relevant skill sets in order to be efficient GST professionals. The certificate course will be conceptualized under the NDA government's flagship scheme of Pradhan Mantri Kaushal Vikas Yojana (PMKVY) and it would be conducted in Delhi, Bengaluru, and Bhopal.
Essentially, the world's third largest economy (by PPP) is to transform itself by removing internal tariff barriers and collapsing 17 central, state and local body taxes into a single GST. Although GST is set to propel hiring, compliance ambiguities such as place of supply (intra- or inter-state), for instance, could pose as a challenge for industries that could adversely affect job creation in the near future. However, once the transition phase eases out, in the long run, GST will add momentum to the entire hiring landscape.
This should, hopefully, add to government revenues and provide it with much needed funds to invest in building and rebuilding infrastructure, stimulate demand and production, and most of all to create the tens of millions of jobs to keep millions of hearts and hopes lit.