These can be taken to the next level over the coming five years, with the upcoming Union Budget setting the pace.
The service sector contributes over 60 per cent of the GDP and employs the largest number of people after agriculture. It is also a major earner of foreign exchange. Services such as travel and tourism, logistics and transport, IT and ITeS, healthcare, financial services, construction and so on have received policy attention in the past. In tourism, the Hriday, Swadesh Darshan and Prasad schemes have been introduced for infrastructure creation at key destinations, while Ayushman Bharat provides a big boost to the healthcare sector.
Internal trade is sought to be promoted through inclusion in the department for industrial policy, and the government’s huge capital expenditure on housing, roads and highways, ports, and airports has helped drive construction activities.
These can be taken to the next level over the coming five years, with the upcoming Union Budget setting the pace. We expect that the budget will provide a strong impetus for skill development which would greatly add to service sector activities, particularly for construction, professional services and healthcare. The granting of infrastructure status to hotels and hospitals could help lower the cost of capital for constructing new facilities. Services exports are a key endeavour of the government which has identified 12 champion sectors for special promotion to add to the stellar performance of IT and ITeS exports. These could be boosted through specific measures in the budget. For example, the tourism sector earns foreign exchange but this is not counted as exports and therefore does not attract the same promotional policies as merchandise exports, including in terms of GST and credit cost.
Finally, it is important to look at specific policies for the identified champion sectors to unlock the potential across the value chains. National policies for tourism, retail, and e-commerce are under discussion and these as well as others could be fast-tracked, thereby enabling the services sector to create many new jobs and reach new heights.
The writer is past president of CII and chair, Services Council of CII