Technology has made sectoral FDI caps irrelevant, Finance Minister Arun Jaitley today said while asking service providers to exploit the inherent potential to become more competitive globally.
The services sector is India’s core strength and the country has the ability to provide services cheaper globally, he said while speaking at the valedictory function of Exhibition on Services (GES).
Technology will play a much bigger role in the coming days, he said, adding the world’s largest retailer does not own even a single store and the biggest transporter does not have a vehicle.
In yet another illustration, Jaitley said: "I can read and enjoy global newspapers on net and ipad or smartphone. How can it make a difference whether I take a physical copy and read…I can see foreign challenges…so our sectoral (FDI) limits really do not matter in these areas".
While 100 per cent FDI allowed in several sectors, there are caps in segments like insurance, media, banking among others.
Although foreign investment is not allowed in legal services, several lawyers in India provide opinion to overseas lawyers.
"I see hundreds of lawyers in Delhi and Mumbai typing opinions and preparing documents and sending it to their counterparts internationally, but we officially do not allow any foreign collaborations…technology and this battle of ideas has defied all areas where we have been slow to grow," he said.
The Finance Minister asked the industry to identify services which are costly in India so that steps could be taken to make them globally competitive.
"Identify those areas where services are not cheaper in India and then go to each one to us to the central government, to the state governments that these are the areas to address where from education to healthcare to IT to professions.
"These are going to be generators of huge number of jobs in India and therefore this is what we owe it to the present India and the future India," he said.
Talking about the scope of services sector, the Finance Minister said every smart city that would be set up would involve construction, education, retail and healthcare, among others.
Services sector accounts for 57 per cent in the country’s GDP and earn about USD 150 billion from exports.