IGCSE Economics Paper-2: Specimen Questions with Answers 100 - 100 of 100

Passage

Labor intensive industry requires a large amount of labor to produce goods and services. In contrast to capital intensive which requires less amount of labor? Example 10 workers can produce 10, 000 products per day.

Question 100 (4 of 4 Based on Passage)

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Short Answer▾

What is the impact of GST on labor intensive industries?

Explanation

The Impact of GST on Labor-Intensive Industries is as Follows

  • Post implementation of GST the growth of labor-intensive industry was declining. It was because of the tedious paperwork and strict compliance.
  • Labor-intensive sectors were not able to cope with the adverse of GST, which came close to demonetization in India.

  • The increased cost resulted in an increase in the working capital needs of exporters.

  • Supply chains were majorly affected and the industrial production was seriously hampered.

  • Due to large share of the unorganized labor-intensive sectors had to bear the effects of GST.

  • Imports increased drastically in these industries. Historically, exports/imports of these sectors have moved in tandem.

  • It has an impact on their revenue growth.

  • It will also have an impact on employment.

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