SERVICE SECTOR OF INDIA

Mayur Mangla 994

GROSS DOMESTIC PRODUCT (GDP):

GDP refers to the market value of all final goods and services produced within a country in a given period. The GDP is a combination of all the differential

factors, contributing to the welfare of the economy. GDP

gives us a combined report of the performance of the

Indian economy.

GDP of INDIA:-

DIFFERENTIATION OF CURRENT GDP INTO DIFFERENT SECTORS

SECTOR PERCENTAGE

Agriculture Industry Services

16.1% 28.6% 55.3%

SOME FACTS
Since 1960 there has been a steady decline in the contribution of agriculture and primary sector to gross domestic product, and its place has been taken by service based

enterprise.
Thus, service sector encompasses the major area of trade finance, insurance, communication, public utilities, transportation, health care, education, business and public services. India is fast dashing towards its dream of conversion into developed country by 2020. Many of the highly paid software wizards the globe have their origin in India, and hence the emergence of service sector has taken a steep positive slope in India.

A well developed country needs a well established service sector

SOURCE: INDIAN ECONOMIC OUTLOOK

Service sector of india:

India is 13th in services output. The services sector provides employment to 23% of the work force and is growing quickly, with a growth rate of 7.5% in 19912000, up from 4.5% in 195180. It has the largest share in the GDP, accounting for 55% in 2007, up from 15% in 1950.Information technology and business process outsourcing are among the fastest growing sectors, having a cumulative growth rate of revenue 33.6% between 199798 and 200203 and contributing to 25% of the country's total exports in 2007 08.The growth in the IT sector is attributed to increased specialization, and an availability of a large pool of low cost, highly skilled, educated and fluent English-speaking workers, on the supply side, matched on the demand side by increased demand from foreign consumers interested in India's service exports, or those looking to outsource their operations. The share of the Indian IT industry in the country's GDP increased from 4.8 % in 200506 to 7% in 2008. In 2009, seven Indian firms were listed among the top 15 technology outsourcing companies in the world.

VARIOUS FACTOR THAT CONTRIBUTE TO SERVICE SECTOR

Trade Hotels and resturants Railways Other transport & storage Communication Banking Realestate Personal services

SERVICE SECTOR
1.Service sector is the lifeline for the social economic growth of a country. It is today the largest and fastest growing sector globally contributing more to the global output and employing more people than any other sector. 2.The real reason for the growth of the service sector is due to the increase in urbanization, privatization and more demand for intermediate and final consumer services. Availability of quality services is vital for the well being of the economy. 3 .Indian service sector has witnessed a major boom and is one of the major contributors to both employment and national income in recent times. 4 .One of the key service industry in India would be health and education. They are vital for the countrys economic stability. 5. The Indian economy has moved from agriculture based economy to a knowledge based economy.

THE REASONS FOR THE GROWTH OF THE SERVICES SECTOR CONTRIBUTION TO THE INDIA GDP The contribution of the Services Sector has increased very rapidly in the India GDP for many foreign consumers have shown interest in the country's service exports. This is due to the fact that India has a large pool of highly skilled, low cost, and educated workers in the country. This has made sure that the services that are available in the country are of the best quality. The foreign companies seeing this have started outsourcing their work to India specially in the area of business services which includes business process outsourcing and information technology services. This has given a major boost to the Services Sector in India, which in its turn has made the sector contribute more to the India GDP.

DATA IN 2008
GDP
GDP

USD 750 billion

growth rate 9.5% contribution 60 %

Services FDI

limit is expected to be close to 100 percent in major industry sectors such as Telecom, Semiconductors, Automobiles, etc.
of Trade Should increase with surging exports as compared with imports goal USD 305 billion

Balance

Investment

DATA IN 2011
GDP
GDP

USD 900 billion

growth rate 9% contribution 60-65 %

Services FDI

limit is expected to be 100 percent in major industry sectors such as Telecom, Semiconductors, Automobiles, etc. of Trade Should be positive with increased level of exports as compared with imports goal USD 370 billion

Balance

Investment

SOME OTHER REASONS ARE: Rise in IT industry. Globalization. Decrease in Industrial production.

Increase in Information & Communication exports.

Increase in International Tourism.

Decrease in Agriculture production.