SOME ISSUES RELATING TO GATS:

GATS AND IMPORTANCE OF LIBERALIZATION OF SERVICESSECTOR:

The importance of services sector can be judged from the fact that worldtrade in commercial services.In the year 2008, World’s total commercial Services exports was US$ 3,780billion and commercial services imports was US$ 3,490.India’s commercial services exports grew from $17.5 billion in 2000-01 toUS$102.6 billion in 2008. India’s commercial services imports have alsogrown from US$ 20 billion in 2000-01 to US$ 83.6 billion in 2008. India

ranked 9th

in export of services and 12th

in import of services.Economic performance: Presence of an efficient services infrastructure isa precondition for economic success. Services such as telecommunications,banking, insurance and transport, supply strategically important inputs forall sectors, both in goods and services.Development: Access to world-class services help exporters andproducers in developing countries to capitalize on their competitivestrength, whatever goods and services they are selling.Consumer Choice: There is strong evidence in many services, e.g.Telecom, that liberalization leads to lower prices, better quality and widerchoice for consumers.

Technology transfer: Services liberalization encourages, foreign directinvestment (FDI). Such FDI generally brings with it new skills and technologiesthat spill over into the wider economy in various ways.

GATS AND LIBERALISATION OF EDUCATIONAL SERVICESIN INDIA

India has no commitments under the Uruguay Round in higher educationservices However, hundred per cent FDI (foreign direct investment) inhigher education services on automatic route is allowed in India. Also,foreign participation through twinning, collaboration, franchising, andsubsidiaries is permitted. India has received requests from several countrieslike Australia, Brazil, Japan, New Zealand, Norway, Singapore, and the US.A similar request in higher education services was repeated in theplurilateral negotiations held recently at the WTO.However, misgivings on the issue persist. Even though India included highereducational services in its Revised Offer in August 2005, many civil societygroups continue to express reservations on the grounds that this would openfloodgates for entry of foreign higher education providers into India. Theirentry was opposed for their being insensitive towards cultural and educationalethos in India and the fear that this would lead to the commodification ofeducation in India. It is also feared that education could be positioned as a ‘tradeoff’ for gains in another sector. However, we need to remember that publiceducation services provided free of cost on a non-commercial basis and not incompetition with other service suppliers is outside the purview of GATS. Inaddition, the role of domestic regulation has been explicitly recognized forensuring equity, consumer protection, standards etc. in provision of publicservices. Given that India needs all the investment that it can get in the highereducation sector, such fears and reservations seem to be somewhat overstated.What we should be aiming at is a sound regulatory framework with transparentrules.