NEW DELHI: Highlighting the need for more opening up the services sector, Prime Minister Manmohan Singh on Thursday said the Government was considering setting up a high-level group to improve its global competitiveness.

Noting that services were now playing an increasingly larger role in the economy, he said services exports, as well as foreign remittances, were keeping the country's current account deficit and balance of payments in a comfortable situation.

Sustaining growth

Inaugurating the International Exposition on Trade in Services organised by the Federation of Indian Export Organisations (FIEO) and UNCTAD, he said the Government was committed to sustaining the rapid growth of the services sector and the UPA coalition had its job cut out in this regard. He pointed out that services now accounted for over 50 per cent of the country's GDP.

"Currently, it is services, along with manufacturing, which are driving our GDP growth to higher rates. In fact, it is services exports, as well as foreign remittances of Indian workers abroad, which are keeping our current account deficit in the balance of payments in a zone of comfort," he said.

Dr. Singh said sectors that had not been exposed to sufficient competition and where regulatory framework was weak, had failed to make a big impact on the economy. He said services such as health, legal, higher education and tourism could have the same growth potential as information technology and in all these areas India had core competence that could be tapped successfully to boost exports. "We are considering setting 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 to sustain its competitiveness in the coming years," he said.

Indicating the need for greater opening up of some sectors, he said the Commerce Ministry had already floated consultation papers for liberalising legal services and education. He said the country needed a policy regime that facilitated and promoted investment, which had to come from public and private sectors, in education services.

In this context, he said huge investments were needed for setting up more universities, professional colleges and nursing schools as this was necessary to feed the emerging international and domestic demand. "I am told that three billion dollars is spent annually by students going from India to study abroad. This could be easily retained in India to expand educational facilities to meet everyone's needs," he said.

More open legal sector

With increase in integration of the Indian economy with the global economy, he pointed to the need for expertise in international, commercial and third country law. For this, he felt a more open legal sector was needed.

As for health services, he said it was an "emerging area," which held immense potential. In particular, medical outsourcing and tourism provided an opportunity for the health sector. An accreditation mechanism for hospitals and laboratories should be established as there was a need to develop standards that met international customer requirements.

Earlier, addressing the meeting, Commerce and Industry Minister Kamal Nath said the services sector was registering robust growth across the world.

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