24.

Services Sector Development

24.1.

Introduction

The services sector plays a vital role in sustaining the growth of Pakistans economy, with a
share of 53.3 percent in GDP, and 44 percent (which includes construction sector) in
employed labour force. A cross-country comparison shows share of services sector in GDP
is currently about 75 percent in developed countries; within Asia, share of services in GDP
was 65 percent in Singapore, followed by 54 percent in case of Sri Lanka, 53 percent for
Pakistan, 52 percent for India and 42 percent for Indonesia.
Boundaries between services and industry are changing fast, and about half of all
services in modern industrialized economies are sold and bought while embedded in the
form of goods. While the content and function of goods remain important, the designing,
marketing, consultancy and advertising services claim a share of the value added to goods.
Manufacturing, too, has important contribution from services, such as resource planning,
warehousing, value chain analysis, financial services and inputs, after sales services, and the
logistics of transport and communication. In the modern globalised economies, it has been
shown that not just manufacturing, but designing can also be done anywhere. This has
resulted in much greater significance for engineering design and consultancy.
Apart from services to business and industry, an important class of services relates to
public services by government, which are an indicator of good governance as well as human
development. These include access to and quality of services related to education, health,
environment, transport and communications, and law and order. Many financial services
such as financial regulation are also expected of good governance and the modern tool of
good governance, namely, e-governance contributes towards providing public information
to people so as to reduce time and transaction costs, and increase quality and transparency
of government functioning.
The private sector is now also perceived as an important partner in provision of even
those services which were the traditional preserve of government. Public private
partnerships, when forged properly, can supplement government activities and
programmes.
The World Trade Organization (WTO) has identified 12 areas with 161 sub-sectors
from the perspective of international trade in services and further aims to liberalise services
sectors in member countries under the General Agreement on Trade in Services (GATS).
Four modes of supply of services have been identified (Annex I).
For 2004-05, service sector as a whole was targeted to grow by 6.2 percent, but actual
growth was 7.9 percent. The main contributions are sub-sectors such as transport, storage
and communications, wholesale and retail trade, finance and insurance, ownership of
dwellings, public administration and defence, and community and social services, which
grew by 5.6 percent, 12.0 percent, 21.8 percent, 3.5 percent, -0.8 percent and 5.4 percent
respectively. Except for public administration and defence, the private sector is increasing
its share of these sectors, with education, health, housing and transport seeing maximum
growth.

Under GATS The Federal Bureau of Standards (FBS) and The State Bank of Pakistan
(SBP) are the two focal institutions responsible for collecting most of the data related to
GATS. SBP has started compiling Balance of Payments (BOP) statistics from November 2003
onwards on the basis of the Fifth IMF Balance of Payments Manual. Pakistans total
transactions in services amounted to US$ 12.069 billion, with exports of US$ 5.378 billion
and imports of US$ 6.691 billion showing a deficit of US$ 1.313 billion during the two years
2002-03 and 2003-04 (the services sector accounted for 44.5 percent of the deficit in trade of
goods and services).
24.2.

Review of Inter Sector Linkages of the Services sector

The services sector has strong linkages with major sectors of the economy, and is strongly
embedded in the sale and purchase of commodities and manufactured goods.
24.3.

Linkages with Commodity Producing Sectors

The salient features of inter-sector backward and forward linkages in the past couple of
years are:
Backward Linkages
i)

Of the non-factors input used by the services sectors, 61.1 percent were
purchased from commodity producing sectors, suggesting strong backward
linkages of services with commodity producing sectors.

ii)

Of the total purchases from the commodity sectors, 73.9 percent were
purchased from manufacturing sector, followed by 14.6 percent from
construction, and 7.7 percent from electricity and gas sectors. The service
sectors purchases from agriculture sector account for 3.3 percent of total
purchases from commodity sectors.

iii)

About 76.5 percent of services sector (public administration and defence, 40.6
percent and transport and communications 35.9 percent) made purchases
from the commodity producing sectors respectively.

Forward linkages
The shares of individual service sectors in total purchases from commodity
producing sectors are agriculture 28.1 percent, mining and manufacturing 70.2 percent,
electricity and gas distribution 1.0 percent, and construction 0.7 percent.
24.4.

Wholesale And Retail Trade (W&RT)

During 2003-04, the gross value added in this sub-sector increased by 8.0 percent,
surpassing 5.9 percent growth witnessed in 2002-03, mainly due to 17.1 percent increase in
the output of large-scale manufacturing sector and sharp increase in exports. Resultantly,
the share of W&RT in services and in overall GDP increased to 35.3 percent and 18.4 percent
respectively. The average share of W&RT in services and GDP for the last five years (19992004) has been 34.6 percent and 18.1 percent respectively.

24.5.

Transport, Storage and Communications

The contribution of TS&C sector on the average for the last five years has been 11.4
percent to GDP. However, because of rapid economy growth in recent years, TS & C is
under stress and need major investments in physical and qualitative terms to meet expected
demand.
24.6.

Information and Communication Technologies (ICT)

Pakistan has seen an explosive growth in the ICT sector in the last few years with deregulation and ending of the monopolies of the state sector. The number of mobile phones
achieved their 2007 target two years earlier, and the recent deregulation of long distance
(LDI) wireless local loops (WLL), other sections have served to provide faster, better and
wide coverage, all at lower costs.
The opportunities within Pakistan are expanding fast on the back of the
governments programmes for digitizing a wide array of administrative databases relating
to ownership of land and property, taxation, judicial records at all tiers, hospitals, and
agriculture. Education sector, health, private businesses and industry at large are also
investing heavily. Nearly 60,000 IT professionals are operating in the country with an annual
turnover of Rs 12.0 billion (or $ 200 million) of which 15 percent is exported.
24.7.

Finance and Insurance

Banks, DFIs and insurance companies, account for 98 percent of value added in this
sector. The finance and insurance sector comprises State Bank of Pakistan, all scheduled
(domestic, and foreign banks) development financial institutions (DFIs), all insurance (life
and general) companies, Modaraba/leasing companies, moneychangers and stock exchange
brokers. The financial sub-sector consists of all resident corporations principally engaged in
financial intermediations or in auxiliary financial activities related to financial
intermediation.
The State Bank of Pakistan has continued to pursue growth accommodative policy
stance since 1999-2000 which has helped promotion of competition and deepening of the
financial sector while broadening its coverage to include the middle and lower income
groups of the population. The impact of this broad based access to institutional credit on the
economy was found to be direct as well as indirect, as it has diversified the client base from
a narrow focus on government, corporate and foreign trade financing to larger spectrum of
financial services extending to consumer finance, small and medium enterprises (SMEs),
agriculture, housing, construction and micro-finance.
The insurance sector and non-bank financial institutions (NBFIs) have performed
better during 2003-04. The total insurance premium of life and non-life insurance for
calendar year 2003 was Rs 55.0 billion compared to Rs 44.3 billion for calendar year 2002.
Presently, 61 percent of the total insurance market is life insurance, but a significant
population do not insure their lives on religious grounds.
Under GATS, insurance falls under the purview of financial services and covers all
insurance and insurance-related services, such as direct life and non-life insurance
(including co-insurance), reinsurance and retrocession; insurance intermediation, such as
brokerage and agency work, and auxiliary services such as consultancy, actuarial, risk
assessment, and claim settlement services. While the insurance industry is regarded as a

strong pillar in the economy it is constrained by issues of legislation, reinsurance, and

taxation.
The need for professional manpower is more immense than investment of capital or
technology, as the number of those possessing international level accreditation British based
Associate Charter Insurance Institute (ACII) or American based Fellow of Life-insurance
Management Institute (FLMI) is very small.
24.8.

Housing and Construction

Ninety percent of the housing sector is financed out of personal savings or

borrowings, and only 10 percent comes from the corporate sector. Recent bank liquidity and
relatively easier credit terms have enabled fast growth sector, but a major skills shortage and
a skills gap is appearing in this sector, as more houses with better standards are in demand.
The vendor industry for the fittings in the housing sector is generally robust.
24.9.

Public administration and Defence

In the restrictive sense of outlays made on wages and salaries of general government
and the sector employees, it contributes about 6.5 percent to GDP. However, public
administration is synonymous with governance and the quality of service it offers to the
countrys population.
Governments around the globe are gradually coming online using processes in
which Information and Communications Technology (ICT) play an active and significant
role, beyond simple digitalization, or automation of governance services, or provision of
LANs, since it is ultimately a tool for good governance and human development.
The main objectives of e-Governance are to increase transparency of government
working, increase and diversify public information and its value, and increase the quality of
products and services being currently offered. This helps reduce high transaction costs (in
terms of time, efforts and opportunities lost) by timely and relevant access to government
information, specially for those who are disadvantaged or marginalized or living in remote
rural areas.
One instance of improved delivery of services has been in the government postal
department, which hascompleted mail tracking system in 7 Divisions in the country, and is
now competing with several private sector entities for mail and courier services.
24.10. Social, Community and Personal Services
Pakistanis are estimated to spend Rs 72 billion annually on charity and philanthropy.
As Zakaat, it helps provide an important safety net for the disadvantaged sections of society
mostly in the form of education, and medical acre.
Voluntary services by citizens and NGOs are growing in the country in order to
mobilize communities and local stakeholders in the process of development. This has been
effective in highlighting the cause of universal literacy, and gender empowerment and
affirmative actions. This has helped first to supplement the state programs in poverty
alleviation and development, and more important, it has provided a benchmark for
comparison. Madrassa are an important form of this private social net.

24.11. Educational Services

Pakistan is only now beginning to invest considerably more in all tiers in of education
than it used to in the last three decades.
The task of improving the size and quality of
education in general , and of economically relevant education (whether these be improved
skills for agriculture, manufacturing or the services sector) is immense, and cannot be met
by public funding alone.
Fortunately, the private sector is quite active in Pakistans education sector. In 200304 it was running 17,621 or 11.4 percent of all primary schools in the country with an
enrolment of 5.83 million or nearly 30 percent of the total enrolment 19.781 million . Its share
of enrolment at the secondary level is 23.1 percent. The private schools are also more gender
affirmative with female : male teacher ratio of 72:28 , compared 40:60: in the public sector.
Interesting experiments are going on in public-private partnerships in several
provinces, whereby government schools are being supplemented by private philanthropy to
meet various gaps regarding teachers, laboratory equipment and basic infrastructure.
24.12. Health Services
Pakistan has one of the best health care infrastructures in the developing world, but
the delivery of service is poor because of several factors as discussed in the Chapter on
Health. The private sector (for-profit segment) plays a major role in the provision of health
facilities and accounts for 60 percent of total expenditure on health. Private clinics and
surgeries, testing laboratories, and chemists shops are the major components of this
contribution from the private sector.
Health insurance is in its infancy, but is increasing its share of the corporate and business
world. Tele-medicine is just beginning to make use of the ICT infrastructure, while medical
transcription and billing for foreign customers also offers good opportunities.
24.13. Objectives of MTDF 2005-10
The MTDF period 2005-10 broadly aims at achieving a sustained average growth rate
of 6.9 percent per annum in the combined output of services. This is based on the premise
that Pakistan needs to make a departure from its inward looking policies and make better
use of rising numbers and improved quality of skills in many sectors within services sector
in Pakistan. Principal objectives for the development of services sector are:
i)

To diversify the existing structure of output of services through improvement

in statistical coverage and by directing investment in favour of business,
finance, information technology (IT) and foreign trade related services.

ii)

To improve the levels of skills and vocational training in the country

iii)

To encourage the private sector to capitalize on the growing communications

and broadband infrastructure in order to build up strategic alliances with
overseas partners in the services sector.

iv)

To promote the growth of engineering design and consultancy in the country,

by building upon the availability of existing expertise

v)

To encourage private sector participation (through public- private

partnership) in areas still dominated by the public sector e.g. ports, roads,
highways and mass transit, civil aviation, telecommunication, broadcasting,
telecasting, health and education services.

vi)

To encourage and assist private sector in setting up specialized researchestablishments and training institutions to cater the state of art of services
market, domestic as well as foreign.

vii)

To improve the methodology for estimating the real output and investment in
the services sectors.

viii)

To improve regulatory framework through encouraging individuals to form

professional bodies/associations in areas of their interest on the pattern of
medical Council, Engineering Council or Chambers .

ix)

To reduce the gap between receipts and payments of services in balance of

payments from last two years average of 20 percent to 10 percent in 2009-10,
partly through improvement in statistical coverage but mainly through
expansion, diversification and broad basing the export of services.

x)

Standardization, recognition and accreditations of services institutions and

facilities with international standards and bodies.

24.14. Strategy for Development of Services Sector

The paradigm of the 21st centaury is built around globalization and the knowledge
economy, and the service sector is bound by the same logic. Competition is the major factor
shaping the economies of developing economies and only skilled and dynamic people will
be able to withstand competition by harnessing their comparative advantage.
In order to develop its service sector, Pakistan recognises the needs to liberalize
operating rights, and separate regulators from operators. It is also necessary to raise
awareness among government officials, the business community and the general
population, so that services should be treated as the primary industry not a tertiary
industry.
The key requisites for an economically vibrant service sector will be good
infrastructure (ICT, transport, shipping), ability to plan and prepare the complete logistics
chain, mobilization of human resources and entrepreneurial capacity, good language and
communication skills, and a clear understanding of how these tools can be harnessed. The
physical focal points where all activities converge will be at the level of SMEs, which are the
principal generators of employment and are also most in need of upgrading skills and
internal processes.
24.15. ICTs
Information and communication technologies (ICTs) are perhaps the most critical
tool for a dynamic and flexible services sector. An efficient, low cost, high bandwidth and
high availability system will help provide an important tool for exploiting a major paradigm
of the 21st century, in which physical and national distances are not important to the process
of analysis, decision-making, commerce, banking, or designing.

Exciting new opportunities are opening up in electronic designing, call centers and
tourism services. There has been rapid growth in call centers and other Business Process
Outsourcing (BPO) services. Currently Pakistan offers the lowest cost either for annual /
hourly costs per seat or transaction costs (Source: Prospects of IT Industry in Pakistan, EAC,
Ministry of Industries, May 2004). It is growing at over 60 percent per annum. Medical and
legal transcription, and accounting services are also doing well, as well as engineering
design services.
To strengthen these programmes, emphasis within HRD is now on quality rather
than on numbers only. Increase in broadband services at lower costs is another priority
during MTDF as this will facilitate better quality and speed of services. The allocation for
ICT in MTDF 2005 10 is Rs 24.59 billion, to be spent on increasing infrastructure for greater
tele-density and broadband services (fixed and mobile/wireless), implementing the
governments ambitious programme for better data collection and management through
digitization of various records and database, and HRD.
24.16. Engineering and Manufacturing
The rapid growth during the last four years in manufacturing in general and large
scale manufacturing in particular, has thrown up a whole new set of opportunities for
manufacturing related services such as integrated logistics comprising the entire supply
chain management, software package development for businesses and industry including
procurement of and hardware, warehousing, distribution (transportation and freight
services), packaging activities, and customs clearance. It is therefore planned to facilitate
growth in the private sector for efficient activities focusing on:
i)

Logistics for the manufacturing sector, which include transport and shipping,
warehousing, customs handling

ii)

Companies who set up regional headquarter (HQ) in Pakistan, for

manufacturing related services, with at least five countries under this HQ.

iii)

Electronic Design Services (CAD, Microelectronics, Graphics, Textiles, and

Fashion Design).

iv)

Back Office Operations, Electronic billing, Call Centers/agencies.

v)

Digital Transformations/Arching (conversion of old engineering drawings to

digital, conversion of paper archives to digital format)

Factor productivity improvements generally arise from better management,

skilled/trained manpower, and efficient use of technology either imported or developed
locally through R&D. It will be necessary to modernize all sectors of the economy and
embed technology in them. Development of skills will be a key ingredient. National
Productivity Council has been accorded the pivotal role for the productivity enhancement
through its institutional strengthening. Tariff rationalization and export orientation are also
expected to result in improved competitiveness and comparative advantage though intersector transfers.
The linkages between government, academia, industry and trade will be enhanced to
bring about demand driven growth, which is rooted in the local talent. Growth by itself is
not enough, if the general well-being of the people is not taken care of. In this regard the

perils of pollution and environmental degradation will be carefully monitored and

mitigated.
24.17. Tourism
Pakistan is blessed with one of the great ecosystems in the world in the form of the
Indus Basin, ranging from snow-clad mountains in the north to mangrove swamps in the
south. The flora and fauna is extremely diverse and the people hospitable. While northern
mountains and Gandhara civilisation are well projected locally and abroad, Pakistan is also
home to ancient civilizations and cultures reflected by group of settlements based around
Mohenjodaro in Sindh, Meher Garh in Balochistan and Harappa in Punjab. These invite an
effective contribution from the private sector tour operators, with help from the state.
The government recognizes the importance of tourism as an economic venture
which is also an employment generator at the local level. Liberal incentives have been
accorded to promote private enterprise in this sector, with a focus on promotion of domestic
and foreign tourism during the MTDF. Major thrust will be on :
i)

Provision of basic infrastructure such as roads and utilities in areas of interest

are on high priority. This includes improving inter-city and urban transport,
including mass transit networks in large cities.

ii)

Facilitating the development of affordable and acceptable chains of hotels and

tourist sites, in northern mountainous areas and around major archaeological
sites in all the provinces by the private sector .

iii)

Improvement in tourist operating services, with emphasis on training of

tourist guides, including learning of foreign languages

iv)

Promotion of religious tourism, with guides well trained in languages and in

expounding with sensitivity the historical and cultural milieu of the present
and past religions in Paksitan.

v)

Development of museums to effectively portray and preserve the rich cultural

heritage of the country and region.

vi)

Preservation of printed, painted, and crafted national treasures

vii)

Encouraging local arts, theaters and music activities.

viii)

Recognition of achievements of local artists and their due promotion.

ix)

Additional financial instruments to enhance credit environment for local

companies.

x)

Effective cultural exchange programmes with other countries.

An amount of Rs 1.28 billion is planned to be spent during MTDF 2005-10 for the
promotion of tourism, basically in promoting infrastructure and its improvement.

24.18. Human Resource Development

During the five-year period 2005-10, the production structure of the economy is
likely to undergo considerable changes, with shifts in the nature of work and demand for
different skills. This will shift employment opportunities across industries and occupations.
The composition of services output is also likely to change because of the inter and
intra occupational movement of labour force on the one hand and consequential shifts in
producers demand for each other outputs. Experience shows that during the process of
socio-economic growth and transition as being experienced by Pakistan, various
components of services react differently to the stimuli of development, which in turn, effect
the composition of output and the pattern of inter-sector demands for each other outputs.
Because of these anticipated changes, the nature and levels of skill and education of
the workforce will need to change to match of the changing content of international trade, in
which share of high technology in manufactures and services is increasing, while those
based on resources or low technology content are declining.
As part of a wider investment in the knowledge economy, an amount of Rs 315.5
billion is planned to be invested in increasing the numbers and quality of Pakistans
educated youth; Rs 32.7 billion will be spent on developing skills and providing vocational
training, which will be of relevant to all the sectors of the economy. Specific to the services
sector will be a focus on hospitality, retail and sales, tourism, graphics and designing,
agriculture and horticulture services, managing livestock, ICT, multi-media,
inventory/stock control, and implementing QA systems among others.
24.19. Projections for MTDF , 2005-10
The services sector is projected to attain growth rates from 6.6 percent in 2005-06 to
7.4 percent in 2009-10, with an average growth rate of 6.9 percent during the period 2005-10.
Within the services sector, its various sub-sectors, like transport, storage and
communications would grow from 6.4 percent in 2005-06 to 6.8 percent in 2009-10 with an
average growth of 6.4 percent during 2005-10. Similarly, the other sub-sectors including
wholesale and retail trade, finance and insurance, ownership of dwellings, public
administration defence, and community and social services on the average during 2005-10
are expected to grow by 8.6 percent, 5.4 percent, 4.6 percent, 6.3 percent and 5.1 percent
respectively (Annex II - IV).
The average growth rate of 6.9 percent during the MTDF is not ambitious for services
sector and can be achieved if commodity-producing sectors (especially agriculture and
manufacturing) simultaneously perform well and provide the associated demands.
Similarly, the high growth rate of 8.6 on the average percent in case of wholesale and retail
trade would be achieved on account of better performance of commodity producing sectors.
i)

Major expansion in transport and communication sector is expected in

telecommunication, information technology (IT), ports (Gawadar Deep Sea)
and improvement in the operating surplus of railways, PIAC and other
supporting and auxiliary transport activities.

ii)

Apart from the normal effects of agricultural and industrial production, the
major contribution to growth in wholesale and trade sector is expected to
come from import of industrial raw materials and capital goods to materialize

the MTDF fixed investment targets. The contribution of agricultural and

manufacturing output to trade sector is likely to follow the historical path.
iii)

Major expansion in banking and insurance sector is expected in export of

financial and insurance services, financial leasing, other financial
intermediations, security dealing activities and insurance of crops and nonlife activities.

iv)

Major expansion in public administration and defence is expected in health,

education and security related activities and district level governance. During
the period of elected governments, some expansion in employment is also
inevitable.

v)

Major expansion in other services is expected in real estate, renting,

advertising, tourism, sporting, recreational, computer and computer related
activities. Other services like health, education, social and personal . may
follow the past 20 years pattern of growth. The growth rates in some of the
services, being the function of population, may decelerate.

In order to ensure maximum coverage of above services, the Federal Bureau of

Statistics will have to extend its data collection network. Without special efforts the
contribution of fast growing services to growth, investment and employment may remain
un-captured.
24.20. Financing of Investment for the Services Sector.
Major portion of investment in services sectors will be self-financed, as almost, the
entire investment in banking, insurance, wholesale and retail trade, social and community
services is financed out of their own savings.
In the ownership of dwellings about 90 percent of fixed investment is financed out of
households own savings or borrowings from friends and relatives. The remaining 10 percent
comes as loan from financial corporate sector. Major sources of financing of investment in
transport and communication enterprises are loan, share capital, government grants and
retained earnings.
i)

Fixed investment in general government is financed out of revenue surplus,

foreign loans and grants. During the last three years about 65 percent of fixed
investment in public education sector was financed through government
grants and the remaining 20 percent and 15 percent through external grants
and loans respectively. Similarly, about 90 percent of fixed investment in
public sector healthcares was financed through government grants, 7 percent
through foreign loans and 3 percent through foreign grants.

ii)

During the MTDF period, financing pattern and sources of financing of

investment in services sectors are likely to remain unchanged. The publicprivate partnership expected in some of the services may change the
financing pattern slightly but overall picture will remain unaffected.

iii)

With a view to liberalizing the policy regime and mobilizing domestic

financial resources for long-term investment, the service sector has been
opened for the first time with specific incentives for local and foreign direct

investment (FDI). FDI, in services sector, is allowed in any activity subject to

condition of prior permission/NOC or license from the concerned agencies
and subject to provisions of respective sector policies. Foreign equity is
allowed to be fully repatriated. The amount of foreign equity investment in
the company/project has been reduced from $ 0.3 million to $ 0.15 million.
iv)

Pakistan has the most liberal policy for investment in services with respect to
its competitive neighboring countries. Many services sectors have been
opened for participation of investment by the foreigners. Further sectors will
be opened in accordance with commitments made under WTO rules in the
service sectors.

v)

To reduce delays in adjudication of disputes related to foreign investments,

amendments have been approved in the National Assembly which stipulate
the High Courts will have first jurisdiction in disputes relating to investments
by foreign entities. The High Courts are further required to decide such cases
within six months. This will reduce costs of doing business in Pakistan and
encourage investments.

vi)

Keeping in view the future scenario, Major incentives in reduction of customs

duty (0-5 percent) on import of plant, machinery and equipments (PME)
without any sales tax and withholding tax would boost investment in the
manufacturing sector of the economy.

vii)

The insurance business would increase if religious objections to the present

system are resolved by introduction of Takaful business in this country by
providing relevant rules under the umbrella of Insurance Ordinance. Some
financial institutions have already made preparations for launching Takaful
companies in anticipation of approval of relevant rules and regulations.

Annex I
Trade in services with the following four modes of supply as defined in the GATS
S.No

Modes

Contents

Cross-border supply

This is the possibility for non-resident service

suppliers to supply services cross-border into
the members territory (e.g. telecommunication
services supplied by one country to another).

Consumption abroad

This is the freedom for the members residents

to purchase in the territory of another member
(e.g. tourism).

Commercial presence

These are the opportunities for foreign services

suppliers to establish, operate or expand a
commercial presence in the members territory,
such as a bank branch, agency, or wholly
owned subsidiary.

Presence of natural persons

These are the possibilities offered for the entry

and temporary stay in the members territory
of foreign individuals in order to supply
services (e.g. professional services).

Annex II
Linkages of Services and Commodity Producing Sectors
(Rs Million )
Sale to
Commodity
Sectors

Purchases
from
Commodity
Sectors

Balance

162,428

5,791

156,637

Hotels and Restaurants

760

7,061

-6,301

Strong backward linkages

Transport, Storage and

Communications

51,039

48,107

2,932

Strong
forward
linkages

Banking and Insurance

6,762

1,545

5,217

Forward

Sectors

Wholesale and Retail

Trade

Remarks

Strong
forward
linkages

linkages
Real Estate Services

2,345

2,998

-653

Business Services

12,940

1,854

11,086

Strong
forward
linkages

Public Admn and

Defence

1,078

54,396

-53,318

Strong backward linkages

Education Services

235

1,668

-1,433

Backward
linkages

Healthcare Services

50

2,895

-2,484

Backward
linkages

Social and Cultural

Services

79

3,616

-3,537

Backward
linkages

Personal and
Household Services

4,190

-4,190

Backward
linkages

237,716

134,121

103,595

Forward
strong
relative to
backward
linkages

Total

Both

( Source: Report of Working Group on Services for MTDF, 2005-10; September 2004)

Annex III
Projected Shares of Services Sectors
Sectors

Benchmark

2009-10

2004-05

Projections

Wholesale and Retail Trade

36.1

35.8

Hotels and Restaurants

2.5

2.8

Transport and

21.1

21.2

Banking and Insurance

5.5

5.7

Real Estate Services

2.1

2.6

Business Services

0.8

1.2

Education Services

3.8

4.2

Health Care Services

2.1

2.2

Social & Cultural Services

2.5

2.6

Personal and Household

4.7

4.7

13.0

12.1

5.8

5.1

100

100

Communications

Services
Public Administration and
Defence Services
Ownership of Dwellings
Total