Home News Reports PM Modi's GST and demonetisation played big role in the formalisation of over 2 million jobs: ISF report

PM Modi’s GST and demonetisation played big role in the formalisation of over 2 million jobs: ISF report

Cumulatively over 28% of 7.06 million jobs formalised in between these four years were due to demonetisation and goods and services tax (GST)

The two bold steps, demonetisation and GST, by the Modi government 1.0, despite drawing flak had contributed immensely in formalising jobs, reveals a study commissioned by Indian Staffing Federation (ISF).

The last four years saw an unprecedented momentum in the formalisation of jobs. More than seven million jobs have been formalised between 2015 and 2018. Cumulatively over 28% of 7.06 million jobs formalised in between these four years were due to demonetisation and goods and services tax (GST).

The Narendra Modi-led government had in November 2016 announced demonetisation of specified high-value banknotes of ₹500 and ₹1000 denominations. GST, a comprehensive indirect tax that subsumed various central and state levies, came into effect in July 2017. The government has drawn harsh criticisms for the haste with which both the steps were implemented and the consequent problems faced by large sections of industry.

- Ad - - article resumes -

However, the report, “Impact of Key Reforms on Job Formalisation and Flexi Staffing”, commissioned by the Indian Staffing Federation (ISF) and executed by data and consulting company Kantar stated that the policies that contributed to formalisation of jobs during the period from 2015-18 include the introduction of the Goods and Services Tax (GST), demonetisation, EPF and ESIC reforms, Skill India initiatives, Fixed Term Contract Reform, as well as the Maternity Benefit reform.

Moreover, the study reveals that only about 16% of India’s estimated 500 million workforces are in the formal sector. The rest are in the informal sector. Modi Government 1.0 had always stressed on higher formal employment.

They contended that India has underestimated the formal employment count thus far. The Economic Survey of 2018 states: ‘India’s formal sector, especially formal non-farm payroll is substantially greater than currently believed. Formality defined in terms of social security provision yields an estimate of formal sector payroll of about 31 per cent of the non-agricultural workforce (non-agriculture, as NSSO-EUS states, is 24 crore or 240 million); formality defined in terms of being part of the GST net suggests a formal sector payroll share of 53 per cent.’

Of the seven million jobs that shifted to the formal sector in 2015-18, EPF reforms contributed 1.26 million (18.16%), ESIC 1.25 million (17.68%), GST 1.08 million (15.32%), Skill India initiatives 0.93 million (13.10%), demonetisation 0.87 million (12.35%), maternity reforms 0.84 million (11.83%) and Fixed Term Contract 0.82 million (11.56%).

The job formalisation graph, credit: Financial Express

EPF and ESIC initiatives include the Pradhan Mantri Rojgar Protsahan Yojana (Government of India pays the full employer’s contribution towards EPF and EPS for the first three years of employment) and Employees’ State Insurance (Central) Third Amendment Rules (all employees who earn Rs 21,000 or less per month are to be mandatorily enrolled for employee insurance under the ESI Act). While both these schemes were launched in 2016, GST came in July 2017.

The study further estimated formalisation of around 11.03 million jobs in 2018-2021 as a result of current and imminent policies and reforms.

Reforms in EPF and ESIC will drive formalisation of jobs the most. The report revealed that flexi staffing industry has witnessed acceleration due to the government’s reforms since 2016. It said the flexi workforce is expected to go up to 6.1 million by 20121 from 4.1 million in 2019. In 2015 and in 2018, the number of flexi workforce in the country stood at 2.1 million and 3.3 million, respectively.

Help Opindia Reach Every Indian. Share This Post
We need your support to survive in the media industry. Please consider paying us for the content we produce:

To know more about these payments, please click here.


Big Story

Sanjay Leela Bhansali set to produce an hour-long movie based on the life of PM Modi and is titled Mann Bairagi.

2019 World Cup Is Here!

Catch the latest on Cricket World Cup as it unfolds, special coverage by Opindia

To Advertise on Opindia.com Click here

‘Professional Congress’ member posts promotional tweets for 500 rupees, blames ‘social media manager’ after having defended tweet

Flipkart Big Billion Sale is here and well, 'Congress supporters' would like to earn a few quick bucks.

‘Kashmir free from shackles of Pakistan sponsored terrorism’: Pakistani org representing Pashtuns refuses to support Imran Khan’s Kashmir protest, backs India

Pashtun Tahaffuz Movement (PTM), the principal body representing Pashtuns in Pakistan, has rejected Prime Minister Imran Khan’s recent call to all people in which he urged them to come out and support Pakistan’s narrative on Kashmir. 

Prashant Kishor’s team starts reaching out to media and influencers with ‘paid content’ offers ahead of West Bengal assembly elections

Darjeeling Chronicle has exposed how Prashant Kishor led IPAC is reaching out to 'influencers' and digital portals to carry out paid campaigning for TMC and Mamata Banerjee ahead of 2021 West Bengal state elections

Suvarna news anchor wants scientist arrested for his sarcastic Tweet about ‘Mysore Pak’, claims his act was ‘seditious’

The anchor of Suvarna news, Jayaprakash Shetty has now asked for the arrest of scientist Ranganathan for claiming Mysore Pak belonged to Tamil Nadu in a sarcastic Tweet

Congress’ AIPC member blames Indian Prime Minister Narendra Modi for an incident of violence in Pakistan

All India Professionals' Congress member Andria D'Souza wants to hold PM Modi accountable for an incident in Pakistan

While talking about Muslims in Jammu, Karan Thapar diminishes massacre of Hindus and Sikhs in Jammu and the KP exodus

Karan Thapar in his article "We cannot be selective about the past in Jammu & Kashmir" in Hindustan Times dated 15th Sept 2019, gives a call to morality, intellectual honesty and being conscious to multiple peoples and their identities.
Stopped for traffic rules violation, Delhi girl threatens suicide

Watch: Stopped by traffic cops, Delhi girl threatens with suicide, helmet attack and then her mother

The girl was reportedly stopped for the broken license plate on her two-wheeler. When the traffic police demanded to see the scooter's documents, she stated that she had no papers.
Image Source: twitter

Malala Yousafzai spreads fake news, claims girl from Kashmir missed her exams on August 12 which was an Eid holiday

According to Malala, one of the three girls from Kashmir missed her exams on August 12. However, August 12 is a notified holiday declared across the country by Government of India on the occasion of Bakr Id or Eid ul-Adha.

Kannada media spreads fake news, accuses Nirmala Sitaraman of ‘giving’ Mysorepak to Tamil Nadu

No one had expected that a huge controversy would erupt over the issue of Mysore Pak, which originated in Mysuru during the rule of Wodeyar dynasty.
Subscribe to Day's Top Stories
[newsletter_form type="minimal"]
- Advertisment -

Latest articles

Connect with us

182,791FansLike
180,445FollowersFollow
97,493SubscribersSubscribe
Help Opindia Reach Every Indian. Share This Post