Stating that the immediate challenge in the services sector is revival of growth, the Economic Survey 2014 said this could be achieved through reforms and speeding up of the policy decision-making.
The survey pointed out that a targeted approach with focus on big-ticket services could lead to a rebounding of services sector growth for India.
Big-ticket itemsIt highlighted that while some services such as software and telecom were big-ticket items that gave India a brand image in services, time has come to focus on some other high potential big-ticket items (such as tourism and hospitality sector, ports services and railways) that have high manufacturing sector and employment linkages.
Services constitute a major portion of India’s GDP with a 57 per cent share at factor cost (at current prices) in 2013-14.
The survey said many issues, including domestic regulations hinder growth prospects of the services sector, which, if addressed deftly, could help the sector and lead to exponential gains for the economy.
Nodal agencyListing some of the general issues, the survey pointed out that there is an urgent need for a nodal agency for the sector.
“Despite having strong growth potential in various services sub-sectors, there is no single nodal department or agency for services… services activities cover issues beyond trade and a more proactive approach and proper institutional mechanism is needed to weed out unwanted regulations and tap the opportunities in the services sector in a coordinated way,” it said.
There was a need for promotional activities for service exports such as setting up a portal for services, showcasing India’s competence also in non-software services in trade exhibitions, and engaging dedicated brand ambassadors and experts, it added.
Further, it stated that “Speeding up disinvestment in some services sector PSUs could not only provide revenue for the government but also speed up the growth of these services.”
For the tourism and hospitality sector, the survey suggested measures such as creating world-class tourism infrastructure even by PPP; addressing multiple taxation issues; skill and etiquettes training to cater to the needs of tourists; special focus on cleanliness at tourist sites and safety of tourists and implementing urgently visa on arrival and E-visa facilities at 9 airports to 180 countries barring 8 ‘prior reference’ countries, among others.
Published - July 10, 2014 01:30 am IST
