India has the second fastest growing services sector, after China, in Asia. The sector is growing at about 9 percent per year, outperforming GDP growth in the last 13 years.
India has the second fastest growing services sector, after China, in Asia. The sector is growing at about 9 percent per year, outperforming GDP growth in the last 13 years. That has prompted the government to foster development in areas like education, health and tourism in a bid to drive broader growth.
India’s services sector accounts for 57 percent of the country’s GDP. Annually, India exports US$151 billion worth of services. But, it exports twice as much merchandise. Now, the government wants to re-balance that growth, by moving up the export value chain.
Finance Minister Arun Jaitley said: “The real job creation is in manufacturing sector and that’s why one of our national challenges is this 15 percent of share of manufacturing today has to be increased by 25 percent, and that’s an uphill task. Therefore that leaves us essentially with the services sector whose growth is a low-hanging fruit in India.”
India hopes to bank on high-tech sectors, like animation, gaming and designing. But it needs to build a competitive talent pool and a skills development programme.
Minister of State for Commerce & Industry, Nirmala Sitaraman, said: “Whether it’s film, entertainment, hospitality, wellness…professional services and so on, all of which have on their own – with probably minimum assistance from the government – shown excellence over the decades.
“They have striven over the decades and established such quality which has given them excellence in international recognition. Most of them are accredited all over the world. So at this stage – where it is already contributing substantially to the GDP – we also recognize untapped potential existing within this sector.”
Analysts said one area with strong potential is tourism. With nine million foreigners expected to visit India each year by 2020, the government is hoping this will boost consumer spending and foster job creation at home.
Source : Channel News Asia | November 18, 2014