New Delhi: Removing restrictions on foreign investment in legal and accountancy services can result in dynamic gains for the Indian economy, the Economic Survey 2012-13 said on Wednesday.
It said immediate attention is needed on several of the restrictions and regulations in the different services like transport, accountancy and legal in order to boost the growth of the sector.
"...The myriad restrictions and regulations in the different services domestically need immediate attention. Removing or easing them can lead to dynamic gains for the Indian economy," it said.
It has listed some important domestic regulations in India, which need to be examined for suitable policy reforms in the services sector.
In accountancy services, the survey said FDI is not permitted in this sector and foreign service providers are not allowed to undertake statutory audit of companies as per the provisions of the laws in India.
There are also domestic regulations like prohibition on the use of individual logos for partnership and single proprietorship accounting firms, it said.
"These regulations need to be relaxed and streamlined to facilitate tie-ups and penetrate foreign markets given the potential for exporting these services by the outsourcing mode," it said.
Talking about legal services, it said FDI is not permitted in the sector and international law firms are not authorised to advertise and open offices in India.
"Foreign service providers can neither be appointed as partners nor sign legal documents and represent clients. The Bar Council is opposed to entry of foreign lawyers/law firms in any manner," it said adding Indian advocates are not permitted to enter into profit-sharing arrangements with persons other than Indian advocates.
In education services, it said these come under the concurrent list with multiple controls and regulations by central and state governments and statutory bodies.
"Regulations of minimum of 25 acres of land to establish a medical college restricts the setting up of medical colleges in cities like Delhi," it said.
In trade and transport services, Survey said some constraints in these sectors include restrictions on inter-state movement of goods which could ease with the adoption of the model Agriculture Produce and Marketing Committee (APMC) Act by many states.
It also called for revision of the Multimodal Transportation of Goods Act 1993 to ease the existing restrictions on transportation and documentation through different modes of transport.
First Published: Wednesday, February 27, 2013, 17:25