The Economic Survey has strongly batted for the removal of restrictions on foreign direct investment (FDI) in legal and accountancy services.
It said 51 per cent FDI in multi-brand retail would not impact small traders who gave a tough competition to the big retail players.
“Immediate attention is needed on several restrictions and regulations in different services like transport, accountancy and legal in order to boost the growth. The myriad restrictions and regulations in different services domestically need immediate attention. Removing or easing them can lead to dynamic gains for the Indian economy,’’ the survey states.
The survey said FDI was not permitted in the accountancy sector and foreign service providers were not allowed to undertake statutory audit of companies as per the provisions of the laws in India. There were also domestic regulations such as prohibition on the use of individual logos for partnership and single proprietorship accounting firms, it said. “These regulations need to be relaxed, and streamlined to facilitate tie-ups and penetrate foreign markets given the potential for exporting these services by the outsourcing mode,’’ it added.
Referring to the legal sector, the Survey said FDI was not permitted in the sector, and international law firms were not authorised to advertise and open offices in India. Foreign service providers could neither be appointed as partners nor sign legal documents and represent clients.
“Studies indicate that there has been a strong competitive response from the traditional retailers to organised retailers, through improved business practices and technological upgradation,’’ the Survey said. “Farmers stand to benefit from the significant reduction in post-harvest losses expected to result from the strengthening of the back-end infrastructure, which would enable the farmers to obtain a remunerative price for their produce,’’ it said. Small manufacturers would benefit from the condition requiring at least 30 per cent procurement from Indian small industries, as this would enable them to get integrated with global retail chains, it said.