The Hindu Business Line : Growth in services to continue: CII-Ascon survey

THE domestic services sector is expected to continue its spiralling growth, according to the latest survey of the sector conducted by the Association Councils (Ascon) of the Confederation of Indian Industry (CII).

The survey, which covers the period between April 2003 and March 2004, said that the fast growing service sectors maintained their growth in the last financial year, often increasing their pace as compared to the previous year. Even the moderately growing sectors did better than in the previous year.

The fastest growing sector was cellular telephones, which grew by more than 106 per cent in 2003-04, way higher than in 2002-03 when the industry grew by 90 per cent.

The survey forecast for the next six months is a growth of about 90-100 per cent.

Besides, housing finance also grew with sanctions of home loans rising by over 30 per cent during the year under review.

Despite the high growth achieved, it was less than the growth of 42 per cent recorded during the previous fiscal. The survey said that the sector is expected to continue to grow at over 30 per cent during the next six months.

In addition, the survey also points out that tourist arrivals have increased by more than 17 per cent, giving the hotel industry a cheerful year, since the arrivals in previous years, particularly during 2001-02, had fallen.

Tourist arrivals in April 2002-March 2003, however, registered an increase of 15 per cent, and the trend continued this fiscal.

The survey estimates that this year, tourist arrivals will rise by another 15-20 per cent.

Similarly, the domestic software industry grew at 15 per cent, up from the 13 per cent growth recorded in the previous year. ITeS-BPO also rose by 54 per cent.

Software exports also registered an increase of 27 per cent, up from 26 per cent during the last fiscal.

According to the survey, the domestic software industry is expected to grow at 10-15 per cent over the last six months while the ITeS-BPO sector is expected to grow by more than 50 per cent. Software exports will rise by more than 20 per cent.

India's rising import and exports was reflected in a good year for the air cargo industry.

Overall, the industry grew by eight per cent, while exports of air cargo rose by 11 per cent.

Imports of air cargo rose by more than seven per cent and the outlook for the next six months for the industry is a growth of 5-10 per cent.

Cargo export and cargo imports are also estimated to maintain a growth of about 5-10 per cent.

The survey also said that the leasing industry had another bad year. It fell by 20 per cent, which comes on top of a five per cent fall in the previous year. Even in the next six months, the outlook for the sector remains negative.

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