With the implementation of GST (goods and services tax), the Indian pharma industry is expected to see a one per cent dip in job creation from the current 14 per cent to 13 per cent. This single tax is viewed to stimulate revenue mobilization and will impact the temporary hiring of staff largely attributed to indirect taxes leading to higher prices.
 
The implementation of GST will not only have a positive impact on the ease of doing business, but it will also boost the revenue of the exchequer as well. The revenue collection from GST will grow from the current 6.3 per cent to 11.49 per cent. Service tax, central excise and customs will also witness growth leading to greater funding towards workforce welfare and sustained job creation initiatives, noted the TeamLease's GST Bill and Jobs Report which has analysed 11 sectors including pharmaceuticals.
 
Across industries adoption of GST will lead to an 11 per cent growth in hiring across sectors. Further, from a region perspective, though marginally South India will top the job generation chart. Blue Collar and Front End Sales’ roles are likely to be the main beneficiaries of this trend, noted the report.
 
In the pharma sector the prevailing job growth rate is 14 per cent. According to Kunal Sen, senior vice president, TeamLease Services, the report speaks about a boost in temporary jobs of the order of 13 per cent, 13.5 per cent from the West, 13 per cent from the East and 12 per cent from North and South India. Temporary jobs are largely in sales and support functions where the jobs are non-perennial in nature or due to fluctuating business conditions coupled with high attrition rates.
 
Agreeing to the findings of the report was Sunil Attavar, president, Karnataka Drugs and Pharmaceutical Manufacturers Association (KDPMA) stating that there is a general consensus that the introduction of GST will improve ease of dosing business which will in turn push up investments and hence an increase in hiring the same will hold good for the pharmaceutical sector. There is also expected to be costs savings in supply chain and logistics and other operations which will allow companies to make more investments in manufacturing and marketing.
 
However, Kaushik Desai, a pharma consultant, begged to differ and went on to state, “I have my own reservations on job creation. Actually, e-commerce and ease of doing business would reduce dependency on overall manpower requirement.
 
“Until GST is implemented in totality, there would not be any measurable effect. The fruits of simplification of taxes by GST, will be seen in 2018 and not in 2017. The recent demonetization would also have some cascading negative effect till first quarter of 2017,” said Desai.