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01/07/2022 - Economy

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July 01, 2022

Productive linked incentive scheme needs to be extended to services sector in the country. Do you agree with this view? Comment (200 Words)

Refer - Financial Express

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IAS Parliament 1 month


·        The commerce ministry expects services exports to overtake merchandise and manufacturing, or at least be on par. This is possible only if services are viewed the same as manufacturing in terms of fiscal encouragement and incentives.

·        Even though it comprises over 50% of the GDP, dwarfing agriculture and manufacturing, the services sector doesn’t receive the recognition or the encouragement in the form of the incentives it deserves.

·        Services exports had exceeded $254 billion, an increase of over 20% year-on-year, despite the contribution being from just three sectors education, healthcare, and travel and tourism.

·        Even though SEIS is under the Foreign Trade Policy, it was only through intense advocacy that a sum of Rs 2,000 crore was earmarked for services exports for 2019-20, largely on compassionate ground as sectors like travel and tourism had suffered immensely due to Covid restrictions.

·        While the government can work on physical connectivity through public-private partnerships by building more airports and highways, it will require individual entrepreneurship to increase the hospitality quotient by adding more hotel rooms.

·        Policymakers have incentivised manufacturing by introducing the Productivity Linked Incentives (PLI) scheme with a well laid out process that ensures investment in capex, resulting in increased productivity and avenues for employment. 

K. V. A 1 month

Kindly review

IAS Parliament 1 month

Good attempt. Keep Writing.



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