Services Sector Current Affairs

Services PMI contracts to 47.8 in February 2018

The Nikkei India Services Business Activity Index contracted at 47.8 in February 2018 compared with 51.7 in January 2018. A reading above 50 implies an expansion while one below 50 denotes a contraction.

The contraction shows that activity and new work in services sector declined for the first time since November 2017, with rates of contraction the fastest since August 2017.

Key Facts

The fall in the services index outweighed the upturn seen in manufacturing PMI in February 2018. Business activity in services sector contracted in February 2018 due primarily to a decline in new orders. Both activity and new work in the services sector has declined for the first time since November 2017, with rates of contraction the strongest since August 2017.

PMI

PMI is an indicator of business activity-both in the manufacturing and services sectors. It is published by Markit Limited. It is a survey-based measure that asks respondents about changes in their perception of some key business variables from month before. It is calculated separately for manufacturing and services sectors and then composite index is constructed. The index figure above 50 denotes expansion in business activity and anything below 50 denotes contraction.

Month: Categories: Business & Economy Current Affairs 2018

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Union Cabinet approves Action Plan for Champion Sectors in Services

Union Cabinet has approved the proposal of Ministry of Commerce and Industry to give focused attention to 12 identified Champion Services Sectors (CSS) for promoting their development and realizing their potential.

12 identified CSS are

Information Technology & Information Technology enabled Services (IT & ITeS), Medical Value Travel, Transport and Logistics Services, Tourism and Hospitality Services, Accounting and Finance Services, Audio Visual Services, Communication Services, Legal Services, Construction and Related Engineering Services, Environmental Services, Financial Services and Education Services.

Key Facts

Cabinet also has directed Ministries/Departments concerned with these sectors to utilize available draft sectoral plans to finalize and implement Action Plans for identified CSS. The respective Ministries/Departments will finalize Action Plans and implementation timelines along with monitoring mechanism to monitor implementation under overall guidance of Committee of Secretaries (CoS) under Cabinet Secretary. Government will set up dedicated fund of Rs. 5000 crores to support initiatives for sectoral Action Plans of the Champion Sectors.  These Action Plans will develop vision for each of these identified Champion Sectors by year 2022 and enumerate steps that need to be taken to achieve that vision.

Significance

It will enhance competitiveness of country’s service sectors through implementation of focused and monitored Action Plans. It will promote GDP growth, create more jobs and promote exports to global markets. Competitive services sector will also add to competitiveness of manufacturing sector as well.

Background

The share of India’s services sector in global services exports was 3.3% in 2015 compared to 3.1% in 2014. Based on this initiative, a goal of 4.2 % has been envisaged for 2022. Its share in Gross Value Added (GVA) was about 53% in 2015-16 (61 % including construction services).

The Group of Secretaries in their recommendations to Prime Minister, had identified 10 Champion Sectors, including three (3) services sectors related sectors and seven (7) manufacturing, for promoting their development and achieving their potential. It was subsequently decided that Department of Industrial Policy and Promotion (DIPP), the nodal department for ‘Make in India’ will spearhead initiative for Champion Sectors in manufacturing and Department of Commerce (DoC) will coordinate proposed initiative for Champion Sectors in Services.

Month: Categories: Business & Economy Current Affairs 2018

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