GST to spur double-digit growth in hiring across sectors, says Report
By Press Trust of India
November 28, 2016. 19:55 IST
The study aimed at understanding the impact of GST on job creation
The implementation of the Goods and Services Tax (GST) will lead to 11% growth in hiring activities, says a report released on Monday.
HR services provider TeamLease said that GST would not only have a positive impact on the ease of doing business but also propel formal job creation.
"Adoption of GST will lead to an 11% growth in hiring across sectors. Further, from a region perspective though marginally South India will top the job generation chart," it said.
Automobiles, logistics, home decor, e-commerce, media and entertainment, and cement sectors are projected to create 11-18% additional jobs annually after implementation of GST.
In the case of IT/ITeS and BFSI segments, the growth rate has been pegged at 10% and 12.5%.
According to TeamLease, around 10 to 13% additional jobs are expected to be created every year by consumer durables, pharmaceuticals and telecommunications sectors.
"The uniformity and the reduction in the average tax burden offered by GST will provide a great impetus to employment creation," TeamLease Services Co-Founder and Executive Vice-President Rituparna Chakraborty said.
The report noted that the predictability of cost of products manufactured or services rendered across the country would improve enterprise productivity.
This would also trigger an expansion of services, capacity and product ranges, resulting in a subsequent increase in manpower requirement, it added.
With GST, TeamLease said revenue collection from the general sales tax would grow from the current level of 6.3% to 11.49%.
"Service tax, central excise and customs will also witness growth leading to greater funding towards workforce welfare and sustained job creation initiatives," the report said.
The study, aimed at understanding the impact of GST on job creation, covers 11 industry verticals including BFSI (Banking, Financial Services and Insurance), automobile, telecommunication, pharma, IT/ITes and e-commerce.