The Hindu Business Line : `More liberalisation to boost growth in retail, banking'

A more liberalised policy framework would help the services sector expand faster and propel the economy to achieve higher growth rates in the next few years.

Liberalisation of the regulatory frameworks would be particularly relevant for sectors like retail and banking, the Secretary of the Department of Industrial Policy and Promotion, Dr Ajay Dua, said here on Sunday.

Addressing the inaugural session of the India Economic Summit here, Dr Dua said that "The services sector accounted for around 54 per cent to the economy and in the next five years its share would go up to 60 per cent."

"The services sector is growing at seven per cent annually and can grow at a higher rate with further liberalisation of regulatory framework," he said.

The sectors that need more openness and a further liberalised regulatory mechanism are the ones like retail, banking, accounting and healthcare, he said and added that though the high growth rates are propelled by services and manufacturing, growth in the labour intensive sectors like footwear were not expanding in the desirable manner.

Taking a note of the low growth rate in the agriculture sector, Dr Dua pointed out agrarian sector has grown at just three per cent in the last decade.

The credit delivery system, he said, has failed the agriculture system, leading to large number of farmers committing suicides in Andhra Pradesh and Maharashtra.

He said that the challenge is to ensure that higher rates of industrial growth trickles down to agriculture and the increase in revenues results in increased funding of social sector projects such as universal education and employment guarantee programmes.

"These are well conceived programmes and they require vast resources. The shift in public expenditure is required to fund social infrastructure," Dr Dua said.

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