Professional Documents
Culture Documents
Significance
Share in GDP
o 1950-51: 30.5 pc
o 2009-10: 55.2 pc
o If construction is included (RBI and WTO method): 63.4 pc
CSO Classification
o Trade, hotels and restaurants (16.3 of national GDP)
o Transport, storage and communication (7.8 of GDP)
o Financing, insurance, real estate and business services (16.7)
o Community, social and personal services (14.4)
Services trade surplus: USD 54 bn (2008-09)
o USD 35.7 bn (2009-10)
China (10.5%) followed by India (8.9%) remain the two fastest growing
economies in top 12 countries.
Statewise
FDI in Services
44 pc of FDI inflows between 2000 and 2009 were in the services sector
(construction excluded)
o Of this financial and non-financial companies have attracted the
largest FDI
Not all sectors are fully open for FDI. Reforms are needed.
FDI in retail <do detailed>
o FDI in single brand retail is permitted upto 51%. Now 100 pc.
o FDI in multi-brand retail is being debated
o Permitting FDI in retail in a phased manner beginning with the
metros and incentivising existing retailer to modernise could help
the interests of consumers as well as farmers
o FDI in retail in bring in latest technology and supply chain
management in the country
o The move for FDI in retail has been opposed on the ground that the
move could result in widespread closure of small time shops.
o The way out could be lay down strict rules of operation for foreign
retail chains
Include requirement of local procurement
This will also lead to stabilising prices by cutting out the
middlemen
FDI in insurance
o There is a proposal to raise the FDI cap in the insurance sector from
the current 26 pc to 49 pc.
o A bill for this has been pending before the Parliament
o Some new sectors in insurance should be opened up like health
insurance
o This will enable India export super speciality hospital services and
medical tourism
o Withdraw FDI restrictions on foreign re-insurance companies. This
will help India access the global re-insurance businesses
Banking
o There is a scope for attracting large investments from abroad
o Currently 74% investment is allowed.
o There is 10 pc limit on voting rights in respect of banking companies
o FDI in banking should be seen in the context of overall financial
stability
New Areas for FDI
o Railways
Rakesh Mohan Committee on infrastructure had
recommended throwing up the entire railway sector open to
private investment
The finance ministry paper (2010) suggested 26 FDI in
railways which can help overcome the current drought in
investment in the railways
o
o
Shipping
Indias shipping tonnage is inadequate, accounting for mere
1.17% of global registration
The share of Indias vessels in carriage of Indias overseas
trade had dropped from 40% in late 1980s to about 9.5% in
2008-09
Accountancy, legal services, healthcare and education services
Way Forward