Services sector to grow 5pc this year

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Keeping in view the great potential for growth, the services sector of the country is projected to grow by 5 per cent during the current fiscal year (2011-12), an official document revealed. Among the services sector, the transport storage and communication is expected to grow by 4.5 per cent, wholesale and retail trade by 5 per cent whereas finances and insurances would grow by 0.2 per cent.
According to the document, revival in the commodity producing sector will support growth in the services sector through rejuvenation of transport and finance sub-sectors. It added that the recovery in agriculture industry will also have a positive impact on the performance of wholesale and retail trade. Although the services sector of the country has been performing well over the last few years, there is a great potential for growth, it added. On the other hand, the investment to GDP ratio is projected at 13.8 per cent during the current fiscal year with total fixed investment at 12.2 per cent. The national savings is projected to be 13.2 per cent of GDP with the national investment and savings gap at 0.6 per cent.
It said that the role of investment in the form of foreign direct investment will be highly dependent on the law and order situation, infrastructure investment, reforms for creating a conducive environment and lastly on increased competition in the domestic market. Moreover, this will be supported by domestic entrepreneurship and innovation in line with the new growth strategy. The Annual Plan for the year 2011-12 has anticipated that FDI will come in the area of oil and gas exploration, trade, financial business, telecommunication and chemicals.