Roadmap for Answer Writing 1. Introduction Objective: Introduce the Goods and Services Tax (GST) and its significance in India. Key Point: Emphasize the goal of creating a unified tax structure to improve ease of doing business and enhance compliance. 2. Indirect Taxes Subsided in ...
Model Answer India's growing working-age population, expected to increase by about 9.7 million annually from 2021 to 2031, presents both an opportunity and a challenge. Labour-intensive manufacturing could help create jobs, but several barriers hinder this strategy. 1. Capital-Intensive Focus in ManRead more
Model Answer
India’s growing working-age population, expected to increase by about 9.7 million annually from 2021 to 2031, presents both an opportunity and a challenge. Labour-intensive manufacturing could help create jobs, but several barriers hinder this strategy.
1. Capital-Intensive Focus in Manufacturing
India’s manufacturing sector has been more capital-intensive than labour-intensive. The workforce in manufacturing shrank from 51 million in 2017 to 27.3 million in 2021, as industries focus more on automation and capital-heavy production processesmits the potential for job creation in sectors that traditionally employ large numbers of workers.
2. Policy Gaps and Lack of Support for MSMEs
While initiatives like Make in India and Production-Linked Incentive (PLI) schemes primarily target capital-intensive industries, the bulk of employment in manufacturing lies in MSMEs (Micro, Small, and Medium Enterprises). However, MSMEs struggle with inadequate banking, financial, and infrastructure support . There for policies that provide tailored support to MSMEs, especially in labour-intensive sectors like textiles, food processing, and footwear.
3. Structural Bottlenecks
India’s complex labour laws, restrictive land acquisition regulations, and high logistics costs (14% of GDP compared to under 10% in developed nations) further complicate the path to scaling labour-intensive manufacturing . These barriersnt and make manufacturing less competitive.
4. Competition from Emerging Markets
Countries like Bangladesh and Vietnam, which have benefited from lower production costs and better market access, are increasingly competing with India in global markets for labour-intensive products . India must address this rising coto retain its market share.
5. Unskilled Workforce and Technology Upgradation
A lack of formal skills training—only 21.2% of India’s workforce had such training in 2019 —limits productivity in labour-intensive secover, sectors like textiles have increasingly adopted automation, reducing the need for manual labour and hindering job creation.
To tackle these challenges, India must focus on supporting MSMEs, improving infrastructure, and upskilling its workforce, creating a more favorable environment for labour-intensive manufacturing to thrive.
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Model Answer Introduction The Goods and Services Tax (GST) is a comprehensive, multi-stage, destination-based indirect tax implemented in India on July 1, 2017. It aimed to unify the tax structure under a single regime, enhancing transparency and compliance while reducing the tax burden on consumersRead more
Model Answer
Introduction
The Goods and Services Tax (GST) is a comprehensive, multi-stage, destination-based indirect tax implemented in India on July 1, 2017. It aimed to unify the tax structure under a single regime, enhancing transparency and compliance while reducing the tax burden on consumers.
Indirect Taxes Subsided in GST
GST has subsumed several indirect taxes previously levied by both the central and state governments:
Central Level Taxes
State Level Taxes
Revenue Implications of GST Since July 2017
The introduction of GST has had significant revenue implications:
Conclusion
GST represents a significant reform in India’s tax landscape, aiming to eliminate the cascading effect of taxes and streamline compliance. Despite challenges, it has the potential to drive economic growth and enhance employment generation in the long run.
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