Draft Report of the High Level Group on Services Sector

Prerequisites for enhancing competitiveness
While the needs of each sub-sector are unique in many respects, the Group felt that action on three fronts was critical for enhancing the competitiveness of the services sector. The education system must be reformed and expanded, the skill deficit in almost all service sectors must be eliminated through concerted action and the physical infrastructure including the urban infrastructure and civic amenities brought to world standards.
Expansion and Reform of Education
Higher education in particular needs attention, as the existence a small number of institutions of excellence has diverted attention from the serious problems of quality in the majority of institutions of higher learning. The curricula must be revised periodically, the method of assessment of students changed so that it encourages the development of analytical and creative skills rather than testing memory. In order to overcome the problem of shortage of teachers particularly in technical education, it is necessary to look into the salary structure and career opportunities of teachers, give them greater freedom to undertake consultancies and allocate funds for them to undertake research.

Apart from expanding public investment in higher education as envisaged in the XI Plan, having regard to the magnitude of new investment needs, it would be necessary to involve the private and corporate sector fully for expanding facilities for higher education. While giving freedom to the private sector institutions in respect of fees, it would be necessary to ensure that they provide scholarships and free-ships to an adequate number of meritorious students (and those from historically disadvantaged and vulnerable groups) who do not have the means to pay the fees. For this the present disability imposed by the UGC and the Regulations of the AICTE and other regulatory bodies on the eligibility of ‘for-profit’ entities to establish educational institutions must be removed.

Skill Development
For skill development, the Group has noted that shortages exist equally at the level of managers and supervisors and of skill categories. In some categories, the numbers being turned out by the institutions are extremely inadequate while in others the quality of trainees is poor and they need to undergo a ‘finishing’ process so that they become employable. The needs of each sub-sector are so diverse that a common template will be inappropriate. The Group has therefore recommended the establishment of the private sector led Development Councils for each sub-sector broadly on the model of the Construction Industry Development Council, which could be entrusted with the task of promoting the running of courses, training of trainers, setting up the curriculum and catalyzing the establishment of independent structures for performing regulatory functions such as testing, certification and accreditation.
Physical Infrastructure
The quality of physical infrastructure including power, telecommunications, road, rail, airports and ports are important for the efficiency of the services sector, although the inter se importance of individual element differs from sub-sector to sub-sector. Except in telecommunications, significant deficiencies in infrastructure erode the competitiveness of the services sector. Of particular importance to the services sector is the quality of urban infrastructure, including sewerage, drainage, water supply, solid waste management and urban transportation.
While two green field airports at Bangalore and Hyderabad are nearing completion there are serious shortcomings in their connectivity with the city. While constructing green field airports or modernizing existing airports attention needs to be given to put in place road and rail connectivity before the new or modernized facility becomes operational. It should not be that the benefit of modern facilities in the newly commissioned airports is nullified by the time taken to reach the city from the airport or vice versa. If the airport is at a distance from the city center it is important that the passengers have the option to travel by fast means such as express trains between the airport and city center.
Urban transportation infrastructure is equally important for enabling smooth movement within the city. All cities must have an integrated traffic and transportation plan, the implementation of which should be monitored by a Unified Metropolitan Transport Authority, as envisaged in the National Urban Transport Policy. In large cities a major requirement is provision of mass rapid transit systems, connecting various parts of the cities including the railway stations and airports. The competitiveness of the services sector is affected if too much time of the worker is taken in commuting between residence and the workplace.In view of the increasing congestion and rising costs in existing metros, it is necessary for the State Governments to promote new townships.