Page 54 - DMGT522_SERVICES MANAGEMENT

Unit 2: Emergence of the Services Economy

This will ensure the common man access to quality education, cost efficient and quality health Notes
care and postal services at affordable costs. The number of public services available to citizens in
electronic mode will be expanded through the Electronic Delivery of Services (EDS) Bill, approved
by the union cabinet on 20 December 2011. In order to leverage the rapid growth in penetration
of mobile technology and connectivity and also to ensure accessibility to all services to the
common man, public services under all e-Governance projects will be delivered through mobile
devices like mobile phones and Aakash tablets. Further, basic banking services, i.e. cash
withdrawal, cash deposit, balance inquiry, and transfer of money from one account to another,
will be extended to every panchayat through the CSCs and money transfer facility to every
village by December 2013, leveraging ICT and mobile technology. This will help make financial
inclusion a reality with the help of IT.

Accounting and Auditing Services

As per the WTO data, in the US$ 28.5 billion other business services exports by India in 2009, the
share of legal, accounting, management, and public relations services was 16.2 per cent and in
the US$ 21.03 billion imports, their share was 26.2 per cent. Indian accounting firms are
increasingly getting integrated and are providing associated services such as management
consultancy, corporate finance, and advisory services in addition to their core business of
accounting, auditing, and tax services. The accounting profession is structured in India as
partnership with few partners or proprietorship concerns and mainly comprises Small and
Medium Enterprises (SMEs). The existing regulations require firms practicing chartered
accountancy to be registered with the Institute of Chartered Accountants of India (ICAI). Out of
48,000 chartered accountancy firms in India, there are only 2,043 that have five or more partners.
The remaining is practicing as proprietary firms or in their individual names. The chartered
accountancy profession in India has globally benchmarked its qualification and training standards
and has entered into qualification-recognition arrangements with accounting bodies in the UK,
Australia, Canada and Ireland. The export potential of India in accounting services could be
tapped by such mutual recognition of qualifications. Tie-ups to overcome the weakness of small
size of domestic accountancy firms could also help India’s accountancy sector grow manifold.

R&D Services

According to Battelle R&D magazine, gross expenditure on R&D (GERD) by India for 2012 was
projected to be US$ 41 billion in purchasing power parity terms, which works out to 0.8 per cent
of GDP. This is low both in absolute terms and as a proportion of GDP compared to other
countries. This is partly because the size of the R&D base and absorption capacity is not
commensurate with requirements (Table 2.9). As per estimates in 2010-11, the sectors which
attracted largest R&D expenditures were pharmaceuticals, electrical and non-electrical Table 2.9
Global R&D spending forecast machinery, transport equipment, electronics, and plastics. R&D
intensity for the pharmaceuticals sector was much higher than that for other sectors. Although
there have been substantial increases in growth rates of patents filed in India during the last
decade, the share of patents filed for work in India through indigenous research is less than 20
per cent of the total. Policy readjustments to increase the number of full time equivalents (FTE)
of R&D personnel are a key requirement for growth in R&D intensity. The FTE of R&D manpower
is estimated at 14.23 lakh for China and 2.29 lakh for South Korea, as compared to 1.54 lakh for
India. Expansion of FTEs to at least 2.50 lakh by the end of the Twelfth Plan could enable the
country to reach the top six ranks in the global R&D landscape.
Though developed nations remain the leaders in innovation, there has been an increasing shift
in R&D activities from developed to developing nations. Developing Asian nations, particularly
China and India, are driving the growth of global R&D. Factors such as low cost, access to new
markets, availability of knowledge-oriented manpower, favourable regulatory environment,

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