GST and Workforce Formalisation in Telangana: Employment Trends, Structural Challenges, and Policy Imperatives

GST has been a meaningful catalyst for workforce formalisation in Telangana, contributing to a growing formal employment base, an expanding registered enterprise population, and a GSDP trajectory that has more than tripled in current-price terms since the reform’s introduction. The EPFO data, tracking consistent annual growth in net new formal subscribers since 2017, is the clearest available national signal that formal employment is expanding alongside the post-GST formalisation push. Yet the evidence also demands honesty about what GST has not achieved. The gap between enterprise formalisation and labour formalisation remains significant. Nearly half of Telangana’s workforce is employed in agriculture—a sector largely outside GST’s reach. The gig economy has added millions of workers to an informal-adjacent grey zone that neither the GST framework nor current labour law fully addresses. Micro-enterprises in smaller towns and rural areas face compliance costs that still outweigh the perceived benefits of registration. And digital exclusion continues to limit who can participate in a fundamentally digital compliance system.   The 2026 National Conference comes at a juncture when Telangana has the institutional capacity, the data infrastructure, and the policy momentum to move beyond diagnosis. The reforms proposed in this paper—compliance simplification, benefit-linked registration, accelerated social protection for gig workers, and digital inclusion—are not radical departures. They build on existing frameworks: the GST architecture, the Labour Codes, the ILO’s Recommendation 204, and the state’s own development institutions. What they require is coordinated implementation and evidence-based design. Generating that evidence, particularly for Telangana’s specific economic geography, is the research community’s most urgent contribution to this agenda.

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