Mr. Arun Jaitley, Union Minister for Finance, Corporate Affairs and Information and Broadcasting has said that the services exports from the country should grow faster to offset the deficit in the merchandize trade.
While inaugurating the Services Conclave 2014 today in New Delhi, the Finance Minister said that within the services sector “ we should focus on low lying fruits like tourism, research & development education etc., where it is easier and quicker to achieve results,” he added.
(L-R) Shri Arun Jaitley, Minister of Finance, Corporate Affairs and Information & Broadcasting and Mr Ajay S. Shriram, President, Confederation of Indian Industry at the Inaugural Session of the Services Conclave 2014
The Conclave is the joint initiative of the Union Ministry of Commerce & Industry and CII. Over 250 stakeholders from various segments of services sector are attending the two-day event.
Mr Jaitley said that the services sector contributing close to 60 per cent of the GDP could be the driving force not only for exports but for generation of gainful employment. In this regard, he said that the manufacturing sector has shrunk its contribution to GDP to 15 per cent. “Our effort is to increase its share to 25 per cent to provide sustainable employment to the people,” he added.
Referring to the WTO negotiations which are at a standstill, the Finance Minister underscored that the definition of globalization has changed over the years. “It is now consumer driven and no amount of patriotism and jingoism can drive the consumers to buy products. They go for quality and price competitiveness”, he added. The positions taken by various developed countries against Business Process Outsourcing (BPO) in the case of IT and IT enabled services (ITeS) has fallen flat because the consumers wanted to have best products at affordable prices, he added.
“Make in India” campaign was evolved to make the Indian products more competitive in terms of quality and price, Mr Jaitley added. There are many issues that have to be addressed, such as labour reforms, facilitating capital flows, strengthening of infrastructure and trade facilitation measures. He assured that the Government would address these issues in right earnest to enable different segments of industry to grow faster.
Mr Jaitley said that a few areas of services sector had to be identified and capabilities built around them to seize the emerging opportunities. In this regard, he said that India could emerge as a regional educational hub. This not only would reverse the trend of Indian students going abroad for higher studies but also could attract students from developing countries to come to India. For this, the quality of education should be considerably enhanced and the objective should be to catch up with the best education institutions in the world.
The Finance Minister also referred to the huge potential India has in the health sector for attracting patients from other countries, who could undergo complex treatments at very affordable prices. A competitive environment was important to upgrade the skills and expertise, he added.
Ms Nirmala Sitharaman, Minister of State for Commerce and Industry, said that the services sector in India had grown without much support from the Government. Some of the sectors like IT and ITeS, films, entertainment, professional service etc. had become world class. The changes brought about in these segments were driven by the industry itself. She wanted this trend to continue since there was a huge untapped potential in various segments of services sector, be it services for domestic consumption or exports. The two day conclave, she hoped , could map the potential and identify strategies to tap them on a sustainable basis.
Mr Rajeev Kher, Union Commerce Secretary, said that India’s share in the world services exports was only 3 per cent as compared to EU’s share of 42 per cent and China’s 4 per cent. “It is a huge challenge for us to increase our share to the global services trade. For this, all stakeholders should come together. Quality of services whether it is for domestic consumption or for exports should considerably go up. The success of IT and ITeS should inspire us to aim high to reach higher orbit of growth in other sectors as well,” he said.
Mr Kher said that Department of Commerce would act as an anchor for permeating Rule based exports. Other ministries and organizations are also involved in the exercise. This would help achieve Indian exporters to penetrate into markets more aggressively.
Mr Ajay Shriram, President, CII, said that a reform agenda was imperative for enhancing the services exports for the country. In this regard, skill development and laying of physical and digital infrastructure were important. Services Trade Agreements both bilateral and multilateral also could help the services sector exports to grow faster. He wanted earliest signing of Totalization agreements with countries, where there are a large number of Indians working.
Mr Malvinder Mohan Singh, Chairman, CII Services Council, said that the services sector should grow faster from the present level of 9 per cent per annum to enable India to achieve 10 per cent growth in GDP in a given timeframe. At this rate, the share of services sector to GDP would increase to 65 per cent. Referring to the health sector, he cited the example of Singapore where it was empirically proved that one dollar investment would have a significant multiplier effect on the community. He underscored the need for creating a strong IT backbone and a regulatory mechanism.
Mr Chandrajit Banerjee, Director General, CII, has referred to the initiatives of CII in skilling people, particularly in the health sector. This, he hoped, would plug the skill gap in the country.
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