Page 50 - DMGT522_SERVICES MANAGEMENT

Unit 2: Emergence of the Services Economy

demand/order flows. In India, the most important component of warehousing is agricultural Notes
storage for agri produce, food grains, fertilizers, manure, etc. Other components include industrial
warehousing for industrial goods, import cargo, and excisable cargo; inland container depots
(ICDs)/container freight stations (CFSs) for facilitating import/export trade; and special
warehouses for cold and temperature controlled storage. The warehousing sector also provides
many ancillary services. The Central Warehousing Corporation (CWC) along with 17 State
Warehousing Corporations (SWCs) provides scientific storage facilities for agricultural produce
and implements and other notified commodities. Its commercial outreach coupled with social
objectives has resulted in the CWC operating a large warehousing network across the country.
As on 31 December 2011, it was operating 469 warehouses, with total storage capacity of 99.81
lakh MT and average utilization of 89 per cent. The number of warehouses is lower than the 479
as on 31 March, 2011 due to de-hiring of capacity. The CWC made an entry into operation of
public-bonded warehouses in the late 1970s, when the Central Board of Excise and Customs
identified it as a custodian for dutiable goods. The CWC has also diversified its business into
CFSs/ICDs and also started container rail transportation from Loni (UP) to the JNPT. In 2010-11,
it added capacity of 1.45 lakh MT with total capital outlay of ` 65 crores. At state level, 17 SWCs
were operating a network of 1,624 warehouses with aggregate storage capacity of 230.10 lakh
MT as on 1 December 2011.
Major policy initiatives taken recently by the government include construction of godowns
under the seven-year/10-year guarantee scheme of the Government of India; permission of up
to 100 per cent FDI in the construction of warehousing infrastructure; construction of warehouses
under the Grameen Bhandaran Yojana of the National Bank for Agriculture and Rural
Development (NABARD) and the Rastriya Krishi Vikas Yojana; making the warehouse receipt
fully negotiable; and construction of godowns under its Private Entrepreneurs Godown (PEG)
scheme. The CWC has constructed godowns with 1.45 lakh MT capacities during the year 2010-
11 and plans to construct additional capacity of 2.09 lakh MT during 2011-12. There is, however,
need to further increase high quality storage capacity and the number of trained samplers/
graders.
2.5.5 Communication Services

The communication services can be:

Telecom and Related Services

Indian telecom has proved to be an international success story with the sector witnessing
commendable growth over the past few years. The Indian telecom network is ranked as the
second largest in the world, next only to China. The total number of telephones has increased
from 206.83 million on 31 March 2007 to 926.53 million as on 31 December 2011. The growth in
wireless connections has been phenomenal, reaching 893.84 million connections at the end of
December 2011, taking their share to over 96 per cent of total telephones in the country. Tele-
density, which is an important indicator of telecom penetration, has increased from 18.31 per
cent in March 2007 to 76.86 per cent in December 2011. While urban tele-density as of December
2011 has reached a high level of 167.85 per cent, at 37.48 per cent rural tele-density is low,
signifying the potential for further growth in rural areas. The liberal policy regime facilitated
the growth of the sector and lowered the costs for consumers, though the recent court cases
related to the telecom sector have dampened the mood. The sentiments in this sector could be
lifted by further reforms which could include rationalisation of the multiple levies and taxes
and using mobile services in the delivery of different social welfare schemes which can increase
its rural penetration. The draft National Telecom Policy 2011 has similar objectives. Since the
announcement of the Broadband Policy in 2004, several measures have been taken to promote
broadband penetration in the country. As a result, there are 13.30 million broadband subscribers

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