Implementation of GST is expected to boost job creation in manufacturing sector, says TeamLease
Bangalore: In all these years manufacturing contribution to GDP has been less than 15 percent and employment less than 12 percent. However, the potential to make this high growth and employment generating is huge. Through simplification of tax calculation, availability of input credit, reduction of cost of production, improved cash flows, ease of registration and lower cost to customer ushered in with implementation of GST is expected to improve the Manufacturing outlook in India and thereby have a positive impact on Jobs.
As anticipated the implementation phase of GST has been complex and that has had a short-term impact on organisations’ priority around hiring across industries including manufacturing. Industry feedback suggests that within this quarter situation is bound stabilize and hiring shall resume. According to IIP (Index of Industrial Production) the industrial production has witnessed a 1.2 percent growth in July from a contraction of 0.2 per cent in June indicating a growth in the manufacturing sector.
In fact, as per IIP data eight out of the twenty three industry groups in the manufacturing sector have shown positive growth during the month of July 2017. Needless to say, GST implementation needs to be backed by on ground actualization of the vision Make in India, Smart Cities, Ease of doing Business, Skilling India and a healthy regulatory regime to create the volume of formal jobs needed for a 13 million youth who are joining the workforce every month.
Incidentally, consumers seem to regained their confidence and have opened to spending. The desire to consume in India remains strong, so consumption will return and seems to have come back already. In the next 5 months we are expecting 50,000 additional jobs getting created just to cater to the increased demand on account of the festival season alone.