Hyper-Growth in Tech start ups in India, says Economic Survey on Services Sector
Rural Penetration of IT Services to Drive ‘Make in India’ Mission
Electronic Visa gives Fillip to Tourism Sector
27-February-2015: Information Technology (IT) and IT -enabled Services (ITeS) makes up the single largest contributor to India’s Services exports. The Economic Survey 2014-15 says the IT and ITeS sector including Business Process Management (BPM), continues to be one of the largest employers in the country, directly employing nearly 35 lakh people. NASSCOM estimates the revenue of the IT-BPM industry at US$119 billion grew by 12 per cent in 2014-15 with export market alone making up almost $100 billion. The year witnessed hyper-growth in the technology start-up and software product landscape, India ranking as the fourth largest start-up hub in the world with over 3,100 start-ups in the country. Software products and services revenues for 2015-16 is projected to grow at 12-14 per cent.
Recognizing the need for greater penetration of IT Services domestically, the Survey notes that the Government’s “Make in India” mission has included IT and BPM among the 25 focus sectors.
Talking of the Tourism Sector, the Economy Survey says the easing of the Indian tourism visa regime through the expansion of Tourist Visa on Arrival enabled by Electronic Travel Authorization (ETA) will give a fillip to foreign tourist arrivals in the country. The Survey notes that there was an increase in growth on both foreign tourist arrivals at 7.1 per cent and foreign exchange earnings at 6.6 per cent in the year 2014. However, India’s share of world tourism is a paltry 0.6 per cent of International Tourist Arrivals compared to 7.8 per cent in France and 6.4 per cent in the US.
Referring to Transport related Services, the Economic Survey points out there is an urgent need to improve India’s ageing shipping fleet. Despite having one of the largest merchant shipping fleets among developing countries, India’s share in total world Dead Weight Tonnage is only 1.1 per cent. While taking note of improved cargo traffic at Indian ports, the survey hints at a major capacity face-lift with an investment target of around Rs. 3 Lac crores by the year 2020, with FDI permissible up to 100 per cent under automatic route for construction and maintenance of ports.
Reviewing the Real Estate and Housing Sector, the Survey says the growth rate slowed down from 7.6 per cent in 2012-13 to 6 per cent in 2013-14 while FDI fell to US$ 703 million in the current fiscal (April – November, 2014). The widening gap between demand and supply of housing units and affordable housing finance solutions is a major policy concern. At present urban housing shortage is 18.8 million units of which over 95 percent is in EWS/LIG segments and required huge financial investment to overcome.
Talking of the over Rs. 11 lac crores worth of Trade and Repair Services Sector comprising 11 percent of GDP, the Survey says that migration from traditional stores to modern retail continues, though the latter still accounts for only 8 percent of the total market. Pointing out that India’s e-commerce market is expected to grow by more than 50 percent in the next five years, the Survey says the government proposes to include sufficient provisions for consumer safeguards in the ongoing amendments to the Consumer Protection Act, 1986.
The Survey also takes note of the vibrant Indian media and entertainment industry comprising TV, Print, Films, Radio, Movie, Animation, Gaming etc and says that with 100 percent FDI permitted in the Film Sector, India is emerging as the new favorite of international studios.