In a bid to fasten economy growth, the government is working for increased liberalization in retail, banking and other sector of the services sector.
“The services contribute to 54% of the economy and in the next five years it will grow to 60%. The sector is growing at 7% and it can grow at a higher rate with further liberalization of regulatory framework,” Department of Industrial Policy and Promotion(DIPP) secretary Ajay Dua said on Sunday.
Addressing the inaugural session of India Economic Summit organized CII and World Economic Forum, he said in sectors like retail, banking, accounting and healthcare much more needs to be done to ease regulatory framework guiding FDIs in India. Mr Dua said there was a case to liberalise the policy framework for labour intensive sectors too. “Labour intensive sectors are not expanding that fast,” he added making a case for footwear, leather and textiles industry.
He said agriculture, which supports 65% of the population, has grown at just 3% over the last decade. Mr Dua said inadequate credit delivery system has been the cause for the slow growth rate of agriculture sector, which has led to a large number of suicides in Andhra Pradesh and Maharashtra.
Pointing towards the decrepit healthcare facilities in India, he said, “The country spends only 1% of the total GDP for healthcare. This needs to be increased on a sustainable basis.”
He also said defence allocations take away a major chunk from the government expenditure, often leaving these sectors with inadequate investments.
He said that the revenues generated from high growth sectors could be ploughed back into schemes like Bharat Nirman, Jawaharlal Nehru National Urban Renewal Mission (JNNURM) and others. “The revenues generated from sectors like services could be used to invest in social sectors like healthcare and rural infrastructure”, he claimed.
“These well conceived programmes require vast resources. A shift in public expenditure is required to fund such social infrastructure,” he said.