India has pre-requisites for building advantage in services but regulations act as a barrier: FM
By TIOL News Service
NEW DELHI, APR 26, 2015: SERVICES are more easily India’s territory and we cannot afford to lose our advantage in the services arena. We have the necessary prerequisites for building our advantage in services - a large and growing population, a reservoir of rich and varied human resources and a population which demands quality services. While in other major sectors - agriculture, manufacturing and mining - there are a number of regulatory and other challenges and which come in the way of unleashing our latent potential which is not the case with services where government intervention is minimal. This was stated by Mr Arun Jaitley, Union Minister of Finance, during the Valedictory session of the Global Exhibition on Services held here yesterday.
Elaborating further on the subject, Mr Jaitley maintained that the services sector provided the opportunity to unleash its own energy and foster growth as it is not entirely dependent on availability of quality infrastructure or natural resources. Moreover, it is an area where chartering new territories would also depend on the creativity and imagination of the human mind. Citing examples of the largest retailer, which has operations worldwide but does not own a single retail store or the largest taxi service which does not own a single vehicle, he said that numerous changes have been happening in the last few years which have made the the brick and mortar model less relevant. Similarly, services are expanding in new unchartered areas and new avenues are being opened up in cyberspace eg in education, banking, etc.
According to Mr Jaitley, the major factor coming in the way of realising our full potential in services is our narrow mindset which envisions a conspiracy in every step we make towards progress. Hence, the response is to either delay or stop any progressive move. No wonder, we fall behind in the world’s competitive battles. This mindset has to be put behind and our aim should be to be a creator rather than the recipient of services. It needs to be realised that sectoral limits on FDI no longer make sense in an era when prohibitions can be breached by technology.
Mr Jaitley said that the new script that is being written and adopted by countries is the primacy of consumer choice in determining market outcomes. While China adopted this precept for Manufacturing by producing quality goods at world beating prices, India has adopted the same for services. India has the potential to provide quality services at a fraction of the cost eg hospitals, tourism, smart cities. He said that we have the best hospitals which provide low cost quality services. However, we have taken long to liberalise our insurance sector. Similarly, our potential in tourism is constrained by our high cost hotels which are among the costliest in the world due to high taxes which are a deterrent. We need to identify focus areas where we have the potential in the services sector and gear our policies to achieve our goal of delivering world class services.
In his opening remarks Mr Rajiv Kher, Commerce Secretary, Ministry of Commerce and Industry, said that the exhibition was the first of its kind on services and has been enthusiastically received by the stakeholders. The three day exhibition has a large number of participants both from India and abroad, with 350 exhibitors from 60 countries and 18 Indian states and around 3000 B2B meetings, informed Mr Kher.
To further promote the sector Mr Kher stressed on the need for a much more intensive approach to tap the latent potential of several other sectors such as tourism, healthcare, education, legal services etc by pushing for internal reforms in the specific sectors.
Speaking at the Valedictory session of the Global Exhibition on Services (GES), Minister of State for Commerce & Industry Ms Nirmala Sitharaman said that the exhibition will be an annual global event to be held in February of every year. It would be a platform for showcasing and sharing experiences in the services sector. She said that the Prime Minister had not only inaugurated the Exhibition but also given a lot of ideas for making Indian services more competitive. She hoped that the services sector would be able to double its income in the next four years.
