Finmin proposes nodal dept for services

NEW DELHI: The Finance Ministry has proposed to set up a nodal department in the ministry for services as the booming sector, which contributes over 60 per cent to the Indian economy, is still not allowed full freedom to tap its potential.

In a draft strategy paper, circulated to various industry and trade bodies, the ministry regretted that lack of a single nodal department or division is the biggest lacunae in the services sector.

The paper, Strategy for India's services sector: Broad Contours, said state governments are also involved in this sector and some services are in the state list.

"So there is a need for a nodal department or division, preferably in the Ministry of Finance which can look into all aspects related to services. This is long overdue with 61 per cent of the GDP being accounted by services in India," the paper said.

There are many restrictions for India's trading partners and services within the country, the paper, circulated to the concerned departments and associations for comments by Senior Economic Adviser in Finance Ministry H A C Prasad, said.

Among the partners, particularly US, the barriers include non-transparent market access in case of Business Services, divergence of norms for allowing foreign lawyers to practice and restrictions in foreign ownership of air carriers.

Within the country services sectors like, telecom, port, distribution, insurance, health, transport, accounting, legal, education and banking face restrictions, the paper said.