New Delhi: The Commerce Ministry on Wednesday said it has proposed formulation of a strategy to push services exports which will also help in bridging the widening Current Account Deficit (CAD).
"We have just proposed this (services exports) strategy.. Keeping that in mind, an inter-ministerial mechanism has been created in the government...," Rajeev Kher Additional Secretary in the Ministry of Commerce and Industry said at a ICRIER-KAS Seminar here.
Concerned ministries like communications and information technology, human resource development, law and justice, health and family welfare are part of the inter-ministerial panel, he added.
During 2011-12, services exports stood at about USD 142 billion, while merchandise exports were about USD 307 billion.
"There is a need to create an environment where we also start talking about services exports as an element of priority," he said.
Merchandise exports has been shrinking for the past few months due to weak demand in the overseas markets like the US and EU, reinforcing concerns about the government's ability to bridge the increasing CAD.
CAD occurs when a country's total import of goods, services and transfers is greater than its total export of goods, services and transfers. CAD was 4.2 percent of the country's Gross Domestic Product (GDP) in 2011-12.
During April-November this fiscal, the country's outward shipments have shrunk by 5.95 percent to USD 189.2 billion.
Further, Kher said, there is a need to recognise that the country's manufacturing activity will take time to revive as it involves issues of huge investments.
To make the country's services sector more competitive globally, Kher said, "We need to recognise the importance of services sector in Indian context and also there is a need to diversify territories and sectors for these exports."
Besides, he said, there is a need to provide skill training in the service sector.
With merchandise demand slowing down in global markets, the Commerce Ministry is drawing a new strategy for achieving exports of USD 500 billion by the end of 2013-14.
The ministry had already drawn a strategy for goods exports.