Services sector sees boom

Services sector continued to grow at an increased pace in 2002-03 over the previous fiscal with cellular phones and housing finance clocking...

Services sector continued to grow at an increased pace in 2002-03 over the previous fiscal with cellular phones and housing finance clocking phenomenal growth rates of 86 per cent and 42 per cent respectively, a CII quarterly survey has said.

The combined communications, hotels, transportation and trade sector grew b y 7.8 per cent in 2002-03 while the combined rate of growth for business services, financing, insurance and real estate was 6.5 per cent, the chamber said in a release.

The fastest growing sector was cellular telephones which grew by more than 86 per cent in the last fiscal as against 80 per cent of 2001-02 and is forecast to grow lower at 65 per cent during the current year.

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The tourist arrivals had increased by 15 per cent during the last fiscal as compared to a fall of 25 per cent in 2001-02. Though it estimates the tourist sector to grow by 15-20 per cent during the current year, the survey was conducted before the outbreak of SARS.

Sanctions for home loans rose by 42 per cent during 2002-03 which is higher than the previous year’s 40 per cent and is expected to rise next year by more than 35 per cent.

While the software industry grew by 20 per cent during 2002-03, its exports rose by 30 per cent and are expected to grow between 25-35 per cent this year.

The hardware industry grew by 12 per cent last fiscal against 15 per cent in the previous year and its exports rose by 20 per cent which is more than the 16 per cent of 2001-02.

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The industry is forecast to grow by about 15 per cent in the current year. The construction industry grew by 12 per cent during 2002-03 against 5.3 per cent the previous year.

The project exports grew lower during the last fiscal by 10 per cent compared to 26 per cent in 2001-02 and are expected to rise by 10-15 per cent in 2003-04.

The recovery in the manufacturing and services sector was aided by good performance in power generation with the thermal power sector doubling the growth rate to 6.5 per cent during the last fiscal over the 3.2 per cent of 2001-02.

The thermal output is expected to rise by 5-10 per cent in the current year.

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However, the drought conditions had an impact on hydel power which fell by 8.4 per cent during 2002-03 over the 0.6 per cent fall in the previous year.

Exports through air cargo which had fallen by about 4 per cent in 2001-02 rose by 9 per cent last fiscal while imports of air cargo rose by 12 per cent during 2002-03 as against a fall of two per cent in the previous year and the outlook for the current year is moderate 5-10 per cent.

The leasing industry which fell by 5 per cent in the last fiscal over the eight per cent fall in 2001-02 has a negative outlook for the next year also.

The fall is due to high taxes, restrictions on NBFCs and weaknesses in the debt recovery system, it added.

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