The government on Wednesday announced a dedicated fund to the tune of Rs 50 billion to support sustained growth in 12 key services sectors apart from initiating reforms to make them more competitive and export-oriented.
The decision to identify 12 specific sub-sectors such as Information Technology and IT-enabled Services, Tourism and Hospitality Services, Medical Value Travel, Transport and Logistics Services, among others, as 'Champion Services' was taken by the Cabinet on Wednesday.
Contributing heavily to the national GDP, exports and job creation, reforms in the services sector had been ordered by the Prime Ministers office. Sectoral action plans will be identified by the Commerce Ministry along with other private stakeholders, a senior official said.
"Embedded services are a substantial part of ‘Goods’ as well. Thus, a competitive service sector will add to the competitiveness of the manufacturing sector", Commerce and Industry Minister Suresh Prabhu tweeted. He added that services trade surplus has been financing more than half of India's merchandise trade.
Services growth has been crucial in aiding overall growth in the country.
Till the global financial crisis of 2008, India’s services exports was registering a good growth for almost a decade and the Compounded Annual Growth Rate for the sector stood at 21.6 per cent during 1994-95 to 2004-05. However, it later fell to an 11.9 per cent growth during 2005-06 to 2014-15, according to the India Brand Equity Foundation.
Post-2015, the government has banked on transportation and business services to nudge the sector into the growth charts and the sector grew by 5.7 per cent in 2016-17. In 2016-17, software services exports, which account for 45.2 per cent of total services, declined by 0.7 per cent due to a challenging global business environment and pricing pressure on traditional services.
In 2016-17, services grew at 7.7 per cent as compared to overall growth of 6.6 per cent, Commerce and Industry Minister Suresh Prabhu said.
In January, the sector grew at the fastest pace in three months, led by a recovery in new orders that prompted companies to sharply increase hiring, according to the Purchasing Managers Index, published by the Nikkei / IHS Markit. The Index rose to 51.7 in January from December’s 50.9. The 50 mark separates growth from contraction.
The decision to identify 12 specific sub-sectors such as Information Technology and IT-enabled Services, Tourism and Hospitality Services, Medical Value Travel, Transport and Logistics Services, among others, as 'Champion Services' was taken by the Cabinet on Wednesday.
Contributing heavily to the national GDP, exports and job creation, reforms in the services sector had been ordered by the Prime Ministers office. Sectoral action plans will be identified by the Commerce Ministry along with other private stakeholders, a senior official said.
"Embedded services are a substantial part of ‘Goods’ as well. Thus, a competitive service sector will add to the competitiveness of the manufacturing sector", Commerce and Industry Minister Suresh Prabhu tweeted. He added that services trade surplus has been financing more than half of India's merchandise trade.
Services growth has been crucial in aiding overall growth in the country.
Till the global financial crisis of 2008, India’s services exports was registering a good growth for almost a decade and the Compounded Annual Growth Rate for the sector stood at 21.6 per cent during 1994-95 to 2004-05. However, it later fell to an 11.9 per cent growth during 2005-06 to 2014-15, according to the India Brand Equity Foundation.
Post-2015, the government has banked on transportation and business services to nudge the sector into the growth charts and the sector grew by 5.7 per cent in 2016-17. In 2016-17, software services exports, which account for 45.2 per cent of total services, declined by 0.7 per cent due to a challenging global business environment and pricing pressure on traditional services.
In 2016-17, services grew at 7.7 per cent as compared to overall growth of 6.6 per cent, Commerce and Industry Minister Suresh Prabhu said.
In January, the sector grew at the fastest pace in three months, led by a recovery in new orders that prompted companies to sharply increase hiring, according to the Purchasing Managers Index, published by the Nikkei / IHS Markit. The Index rose to 51.7 in January from December’s 50.9. The 50 mark separates growth from contraction.
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