Approach:
- Answer wants you to discuss the significance of cooperation in service sectors, which plays an important role in a country’s development.
- In the intro, discuss the importance of service sector in India.
- In the 1st part of the main body, discuss the issues of the fragmented service sector in India and reason behind it.
- Later examine the present scenario of co-operation in India’s service sector and what are the steps taken by the government regarding better assimilation of various service sectors
- Conclude with suggestions in overcoming the gap among various sectors.
Answer
Service sector has been the growth engine of India’s development story post LPG, contributing more than 50 percent of India’s GDP.
How the cooperation among various service sectors help Indian development process:
- India has a huge demographic dividend and it has to be leveraged fruitfully over the next few decades.
- The potential of our youth has to be realized through education, skill development, elimination of gender bias, employment and good health.
- The resultant issue of job loss due to the technological interventions can be tackled better in Indian development and growth context.
- While India is among the top 10 World Trade Organization members in service exports and imports, the growth and export of services is less than that of the People’s Republic of China, and exports are competitive in only a few services and are concentrated in a few markets. Hence, the close cooperation and collaboration is the need of the hour.
- Most of the poor in India do not have access to basic services such as healthcare and education, and infrastructure is weak so the cost of service delivery is high. If India needs to breach the gap between GDP growth and inclusive growth, then this cooperation is necessary.
- Research and development and ICT can play key roles in inclusive growth by ensuring access to cheaper technology and by disseminating knowledge
However, lack of cooperation among service sectors have dented India’s growth to some extent.
- Disintegrated transport sector-Road and Rail transport are seen in vaccum by policy makers.Result is road development fail to take into account railways(frequent tussle between highway developers and railways for demand of highways of rail blocks by highway developers)
- Education and healthcareespecially for children have suffered due to this lack of cooperation.
- SEBI IRDA conflictover ULIPs is a classic case of dent in regulation due to lack of cooperation among service regulators..
- Fragmentation: Multiple ministries and central government departments regulate services such as energy and transport while others like construction and retail do not have nodal ministries.
- Non-Homogenous: The services sector is a highly non‐homogeneous sector comprising a wide range of activities. There are differences within the services sector with regard to the contribution of different sub sectors to GDP and to employment. Services are inherently diverse; thus, it seems unreasonable to provide an integrated management framework that can apply to all industries.
However of late many integrative measures have bore rich dividends.
- JAM trinity is a novel integration and cooperation between three services-Banking, Universal ID and mobile services..This lead to financial inclusion and inclusive development
- Concept of integrated multimodal transport is a very good way to extract the best of all modes and provide a reliable and cheap mode of transportation system.
- Merger of water resources and drinking water ministry would synergize efforts of both the ministries, as well as bring out a kind of team spirit among them.
- Hence better cooperation must be sought after.Govt can devise a services council in line with GST council so as to cooperate among federal service sectors as well .
Way Forward
- There is an urgent need to focus on the service sector and to identify the key barriers faced by different types of services and then to undertake specific reforms. For instance, in road transport, reforms should focus on establishing a seamless supply chain by removing barriers to the interstate movement of goods.
- In the case of industries like energy, various government departments should work together to design a policy that will facilitate equitable access at affordable prices.
- Regulations should be transparent and non-discriminatory, should take into account the evolving nature of the service sector and its links with other service related sectors, and should support its growth.
- The government can work with industry and with educational institutions in public–private partnerships to identify skill requirements and design appropriate courses and training programs to facilitate their better cooperation.
- Focusing on vocational training and developing appropriate curricula will increase the employability of students in the service sector. The quality of education can be improved through proper collaboration with other service sectors at international standards.
The service sector will be able to contribute to inclusive growth by enhancing investment, creating employment and human capital, developing infrastructure and lastly, by better cooperation & assimilation among themselves. It is important for a developing country like India with a large, young population to generate quality employment and to move up the value chain. If the reforms suggested here are implemented, they will enable better cooperation among sectors which in turn will enhance the productivity and efficiency of the sector and lead to inclusive growth.
