goods and services tax is being hailed as the most far-reaching tax reform ever in independent india. gst will curb ambiguity in indirect taxation, will ease compliance and can augment tax collection of the government, all agreed. but has gst delivered on the front that is all more critical than these, did the government factor in job creation while planning for gst roll out?
in bits they did. they foresaw automatic creation of jobs once the tax reform comes into play, for businesses will need tax consultants to understand the new complexities and to steer clear of penalties for wrong/ delayed filings. but what the government did was to leave it to the market forces for creation of new jobs, and this is where they made a blunder.
in a recent letter to chartered accountants across india, pm modi has requested for their cooperation in honest and effective implementation of gst. this is where the problem lies.
the already well-off community of chartered accountants, where the number of professionals is deliberately kept low to enable the existing ones make windfall profits owing to the ever-high need of taxation consultants in the country, has emerged as the only winner. by inviting their support, the prime minister has only undermined the interests of non-ca fraternity, comprising of simple commerce graduates.
the need was to create a pool of gst professionals by picking up fresh graduates from rural/ undeveloped parts of the country and training them for a year or even 6 months on what gst exactly is and how businesses, small and large, have to comply with new tax reform. in one go, the government would have created lakhs of jobs for fresh graduates and in the process would have decreased the unwanted dependency of businesses on chartered accountants.
the pm, finance minister and the think tanks failed to notice the pressing need of creating new jobs for lakhs of youths joining the unemployed bunch every year. skill development by various ministries is only adding to skills, but where are the jobs? factory growth is dismal, it sector has lost its sheen and there isn’t much hope in agriculture.
so where does the government feel this newly skilled youth will be absorbed?
gst reform could have delivered on multiple counts, job creation, equity in income distribution, augmented spending by households, lessening the workforce presently employed in agriculture, cutting well-known malpractices undertaken by chartered accountants to enable businesses evade taxes by replacing them with a fresh pool of tax professionals, and much more.
gst, sadly, remains an untapped opportunity but can be a lesson for future reforms. there can be no question raised on the intent of the government to usher in true reforms, however, holistic planning is required to fetch maximum benefits out of a single move.