ervi es e tor      10.11
     business orders as collateral for credit-worthy              Some suggested measures in this area, as per
     service firms.                                         the Economic Survey 2014–15, are:
     Tax and Trade Policy related: These include use of           (i) creating world class tourism infrastructure
     ‘net’ instead of ‘gross’ foreign exchange criteria for           even by PPP;
     export benefit schemes, the issue of retrospective          (ii) addressing multiple taxation issues;
     amendments of tax laws like,                               (iii) skill and etiquettes training to cater to the
           (i) amendment to the definition of royalty                 needs of tourists;
               to include payment of any rights via any         (iv) special focus on cleanliness at tourist sites
               medium for use of computer software,                   and safety of tourists;
          (ii) tax administrative measures to tackle             (v) using the MGNREGA for creating
               delay in refunds,                                      permanent       assets      like    tourism
        (iii) introducing VAT (value added tax)                       infrastructure and facilities;
               refund for foreign tourists, and                 (vi) organising mini India cultural shows on
         (iv) addressing the issue of bank guarantees                 a daily basis at important tourist sites
               based on past performance to avail of                  that will not only attract tourists but also
                                                                      generate employment for Indian artists;
               export promotion benef its in services.
     sectorAl issues                                           (vii) implementing urgently visa on arrival
                                                                      and E visa facilities at 9 airports to 180
     Area-specific policy hurdles to the services sector
                                                                      countries barring 8 ‘prior reference’
     are also there. Together with the general issues,
                                                                      countries (this decision has already been
     these area-sepcific bottlenecks do not allow the                 taken).
     sector to realise its real potential. The major ones
     in this area are being outlined below.                 Port services: Indian ports are not world-class ports
                                                            and lack the necessary draft. As a result, ‘third-
     Tourism and hospitality sector: As per the latest      generation ships’ are not able to enter the harbour
     data of world tourism, India’s tourism has not         and goods have to be offloaded outside in smaller
     been competitive enough to attract tourist due to      ships, adding to costs. If India can develop world-
     several reasons, such as,                              class airport infrastructure and metros, there is
           (i) India’s share in world tourist inflows was   every reason to attend the concerns of the port
               only 0.64 per cent in 2012 (rank 41),        services. Its immediate focus should be on—
               while that of the USA was 6.47 per cent            (i) building world class ports providing
               (rank 2) and China 5.57 per cent (rank                 world class services that will also help
               3).                                                    the trade sector by reducing costs and
          (ii) India’s share in world tourism expenditure             turnaround time in ports, and
               is relatively higher at 1.65 per cent (rank       (ii) reducing port charges which are
               16) implying that foreign tourists spend               considerably higher.
               relatively more in India.                    Shipping, shipbuilding and ship repairs: Indian
        (iii) Singapore, a small country, attracted         ships in the carriage of India’s overseas cargo has
               11.10 million tourists in 2012, while a      fallen sharply and Indian ships are ageing, too.
               large country like India attracted only      Government-owned shipyards like Visakhapatnam
               6.97 million foreign tourists during 2013.   are facing problems like declining orders. India’s