New Delhi: Technology has made sectoral FDI caps irrelevant, Finance Minister Arun Jaitley on Saturday 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 percent in the country's GDP and earn about USD 150 billion from exports.
Jaitley said the competitive battle for services and the expansion of services are areas in which India cannot afford to lose.
He further said while other sectors like manufacturing and agriculture pose more challenges, services segment has been a more easy territory.
Jaitley said one needs population and good human resource for growth of services and they are easily available in India.
Jaitley said the major factor coming in the way of realising full potential in services sector is the narrow mindset which envisions a conspiracy in every step.
"What has stopped India from realising its full potential is that we see too many conspiracies and therefore when new areas are chartered, there are many minds which work overtime to find out where the problem is and how it can be stopped.
"And when we stop these areas we are actually falling behind as far as the world competitive economic battle is concerned. I think today, how do I stop, how do I delay, this is the mindset we have to put behind us," he said.
Talking about the need of easing certain rules, Jaitley citied another example saying: "...Our philosophy of obstructionism says unless you have so many lakh square feet or so many acres of urban land you cannot set up a medical college. So don't we need to relax them".
