Will GST implementation help boost employment and eventually growth
Will GST implementation (the biggest ever indirect tax reform ever taken up in India) help boost employment and eventually growth
GST refers to goods and services tax and in simple definition, it means value added tax or VAT on not only the goods, but also the services. The Modi-Government, which is known for its reformative approach, has planned to bring about the transition in the economy by implementing GST. The simplification of the taxation system shall be done by way of mergers of a spectrum of other taxes like entry tax (local tax given by someone for entry into municipal area), entertainment tax, passengers’ tax and electricity duty.
The most imperative aspect of GST will be reduced distortions and also slashed compliance cost that taxpayers need to shell from their pockets. Introduction of GST into the financial system of Indian economy will help in bringing about following benefits:
1. Broaden the range of tax base
2. A wider input tax credit will help in reducing distortions
3. Increased competitive spirit for exporters by way of reduced domestic taxes
4. Adieu to the inter-state sales tax, that will help in enhanced regional equity
5. Removal of inter-state trade hurdles that will help in the creation of almost perfect national market
6. Simplified and well-balanced tax structure and mechanism, which will help in uniformity of administration across all states and reduced compliance cost that taxpayers need to pay
7. GST can boost India’s economy by 2% if well implemented
8. If GST is implement than it will directly generate revenue of $15 billion per year
9. Biggest advantage would be reduction in prices of goods which would indirectly increase consumption and higher profits for companies
10. Improved economy would mean more jobs
How Modi’s Push Will Help In Fast tracking GST Implementation?
Prime Minister Narendra Modi, who is known for rapid action and quick decision, said that the union Government will take all possible steps for introducing the Constitutional Amendment Bill that will help in taxation reforms through GST. The Bill will be presented in Winter Session of Lok Sabha. Mr. Modi also took into consideration the newly proposed taxation regime and gave his nod for clearing the pending CST in a fast track process.
The Constitutional Amendment Bill for taxation regime was at first introduced in the Parliament by the UPA in the year 2011. However, the Bill has not been finalized into an Act as till now. Arun Jaitley, the Union Finance Minister, while presenting his first budget had indicated that there shall be a “final solution” in the present year for introduction of goods and services tax.
So far, the implementation of GST has remained struck because of political roadblocks concerning loss of discretionary monetary power and gains to the State Governments. But, Modi’s push to the GST implementation would help in fast-tracking the entire process.
Discussion
- RE: Will GST implementation help boost employment and eventually growth -Deepa Kaushik (09/26/14)
- The Goods and Service Tax reform is a good presentation with regard to its benefits to the common man in some ways. But would that really help in boosting up the employment remains a query to be answered, which could be possibly and productively done by time in the long run. The topic under discussion focusses on GST, its relation with the employment and the growth of the nation.
If we just talk of the implementation of GST alone, as given by Viraj, it has a lot many benefits to yield the common man and raise him from the undue burden of taxation. This could help in reducing the net MRP of the products for the consumers and increase in the sales for the manufacturers. For every gain, there is some price that need to be paid. This GST definitely have some impact on the gains to the State Revenues which requires to be accepted to have a lasting balance in the economic situation of the country.
Coming on to the employment issue, implementing the GST would definitely help in increasing the demand and supply of the goods which will eventually help in the economic growth. Such an economic development can definitely help in boosting up the employment and get the economic growth in geometric progression. But, when we get our minds out of the theoretical possibilities and concentrate on the India’s current status, we can hardly implement the GST in true sense. If at all the unemployment had to be fought efficiently, the Government should have smartly used the various taxes levied to be used for creating new employment opportunities. That again gets stuck as usual at the same zone of corruption which pulls back the racing steps of the economic development of the country.
To summarize this topic, it would be definitely helpful to have the GST implement, though it does not necessarily help in boosting up the employment. GST would help in the growth of the nation with regard to the satisfaction and better living standards of its citizens. Still, for the employment opportunities, we are undoubtedly in a fix to eradicate corruption and have an efficient management of the available resources.
