New Delhi: The wait for a comprehensive index of service production is expected to get longer, till the long-overdue goods and services tax (GST) system overhauls data collection by tax authorities.
The services production index, analogous to the Index of Industrial Production (IIP) and to be brought out by the statistics ministry, requires tax data to be classified by entity.
This needs the Central Board of Excise and Customs (CBEC) to modify its information systems. Officials said this will happen only after GST is rolled out.
The services sector contributes about 60% to national income, but there is no survey tracking trends in service sectors such as trade, hotels, communications, and banking and finance.
Recently, the ministry of statistics and programme implementation developed a mechanism to service industries, the feasibility of which is being tested through pilots, said T.C.A. Anant, chief statistician of India.
“Given the importance of the sector, its diverse nature and lack of data on an annual basis, the need for compiling the index of service production with an appropriate periodicity was felt for a long time,” the ministry says in a note on its website.
But data for a comprehensive index covering the diverse sector will be available only when the much-awaited GST is in place, which is now likely to happen only from 2015-16 because of persisting differences between the Union and state governments.
The GST system aims to create a unified national market for goods and services by removing all barriers to their movement across states. Prime Minister Manmohan Singh, during a recent trip to Japan said GST may not be launched during the current term of this government, scheduled to end in May next year.
“For railways, postal services, air travel and banking, we have been able to come out with service production indices, but there are other areas such as trading, health, hospitality and private freight transportation where it can’t be done without a system to collect data on output,” said an official in the statistics ministry, who did not want to be identified.
“We have been discussing this with the CBEC for some time for them to collect this output data classified by entities,” said the official.
“The CBEC has informed them (the statistics ministry) that the classification of services is possible only once GST is rolled out,” said a finance ministry official, also speaking on condition of anonymity. “Once GST comes in, we can have a classification of services as well, as we have for goods now. Under it, there will be a common tariff for both goods and services.”
Anant said the current approach to the index of service production is sectoral and not entities-based, which leaves out sectors where private providers of services dominate.
An experimental index of services production has been brought out since 2005-06 for railways, air transport, banking and postal services following the recommendations of a technical advisory committee under Jawaharlal Nehru University professor C.P. Chandrashekhar.
Source:-www.livemint.com
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