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High level group soon to help sustain service sector competitiveness

FOR LIBERALISATION: The Prime Minister, Dr Manmohan Singh, and the Union Minister of Commerce and Industry, Mr Kamal Nath, at the International Congress and Exposition on Trade in Services in the Capital on Thursday. — Kamal Narang

New Delhi , Oct. 5

The Prime Minister, Dr Manmohan Singh, on Thursday pitched for a "more open legal sector" in the country, stating that expertise in international law, commercial law and third country law is necessary as the Indian economy increasingly integrates with the global economy.

He also underscored the need for establishing an accreditation mechanism for hospitals and laboratories even while pointing out that health services are an emerging area that hold immense potential for India.

Addressing a special session at the International Congress and Exposition on Trade in Services, organised by the Federation of Indian Export Organisations, Dr Singh said the country's educational system must be expanded to translate the "demographic dividend" into a "development dividend".

He also indicated that the Government would soon set up a high level group in the Planning Commission to look into all aspects influencing the performance of the services sector and suggest policy measures that would need to be taken to sustain its competitiveness in the coming years.

This group would consist of members from Government, business and academia and its recommendations are expected to act as a roadmap for this sector.

While indicating that offshoring was here to stay, the Prime Minister said that by 2010 as much as $110-billion business could be offshored and that the country was in a position to capture half this market.

"The direct and indirect employment impact could exceed a crore jobs within five years. This could contribute an additional 1 per cent per year to our GDP growth," Dr Singh said.

He stressed the need to pay focused attention to factors that affect the competitiveness of each sub-sector. "Each sub-sector has its unique characteristics. These need to be identified and measures taken to improve the supply capabilities of each sub-sector", the Prime Minister said.

In education services, Dr Singh said that there is a need for greater investment, both by the private and public sectors. "I am told that more than $3 billion is spent annually by students going from India to study abroad. This could be easily retained in India if we are able to expand educational facilities to meet everyone's needs," he said.

Services would continue to bear a proportionately larger burden of propelling the country's economy to a higher growth trajectory even as all efforts were being made to boost agricultural and industrial growth.

The Prime Minister said the success of the service sector "cannot be sustained if we do not improve our skill and knowledge base".

Meanwhile, the Commerce and Industry Minister, Mr Kamal Nath, said liberal commitments from developed countries in all modes, particularly in cross border supply and mode 4, would strongly incentivise negotiations for developing countries and enhance the latter's ability to respond to plurilateral requests. He said that flexibility to developing countries in taking commitments is a must.

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