In a move which if implemented could see a considerable improvement in India’s share of global services trade, the government is said to be deliberating on collecting data on foreign earnings of service based industries including entertainment, logistics, telecom, professional services, medical tourism and market research.
Centre's plan includes carrying out surveys of companies that earn foreign exchange from services of various categories and then, for validation, match data provided with available income and tax data of the firms concerned, the Economic Times reported.
India’s share in global services trade, which currently stands below 5 per cent, could get a much-needed push if the move goes through.
Presently, the Reserve Bank of India estimates foreign exchange earnings from services by looking at data from bodies such as Nasscom (for software services) and the Tourism ministry, and from foreign exchange transactions reported by banks to the central bank.
Company-level hard currency earnings won’t be made public by the government, but broad category-wise foreign exchange data will be, an offcial privy to the matter told ET.
Firms may instead worry about giving out data on full foreign exchange earnings because of tax implications, he added.
The government will also need to revamp Kolkata-headquartered Directorate General of Commercial Intelligence and Statistics (DGCIS) in terms of number of personnel and information technology prowess.
DGCIS engages in collection, compilation and dissemination of India’s Trade Statistics and Commercial Information.
Second, many firms don’t fully understand the nature of trade in services, officials said. Services are traded through four modes.
Mode 1, or cross-border supply between countries; Mode 2, or consumption abroad; Mode 3, or commercial presence, which includes joint ventures between foreign service providers and domestic businesses; and, Mode 4, or movement of people.
Centre's plan, if implemented successfully, may very well bring out how much our superstars really earn in foreign currency.
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