The Economic Survey 2009-10 today made out a strong case for liberalising foreign direct

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investment policies for health insurance, rural banking and higher education, stating FDI can boost trade in services.

"In the case of services sector, a more conducive environment can be created by liberalising FDI in services like health insurance, rural banking and higher education as FDI inflows and trade in services have a close relationship," the Survey said.

"Well thought out policy measures would give a boost to the services sector," it said.

Expediting auction of high speed third generation telecom technology, removing 10-year disinvestment clause on FDI in insurance and liberalising the foreign investment in the animation sector are the key suggestions of the document, tabled in Parliament by the government a day before the Union Budget.

It also called for encouraging venture capital in services and exemption of external commercial borrowings from the withholding tax for financing export-related activities and overseas acquisitions.

The Survey said that with pick up in export of software and increase in foreign tourist arrivals, the country's services exports are expected to grow in the current fiscal, even as it contracted in April-September 2009-10.