Indian Service sector is amidst an unprecedented boom.
Here is a brief profile of service sector in India.
Service Sector in India
Service Sector in India today accounts for more than half of India's
GDP. According to data for the financial year 2006-2007, the share of
services, industry, and agriculture in India's GDP is 55.1 per cent,
26.4 per cent, and 18.5 per cent respectively. The fact that the service
sector now accounts for more than half the GDP marks a watershed in the
evolution of the Indian economy and takes it closer to the fundamentals
of a developed economy.
Services or the "tertiary sector" of the economy covers a
wide gamut of activities like trading, banking & finance,
infotainment, real estate, transportation, security, management &
technical consultancy among several others. The various sectors that
combine together to constitute service industry in India are:
- Trade
- Hotels and Restaurants
- Railways
- Other Transport & Storage
- Communication (Post, Telecom)
- Banking
- Insurance
- Dwellings, Real Estate
- Business Services
- Public Administration; Defence
- Personal Services
- Community Services
- Other Services
There was marked acceleration in
services sector growth in the eighties and nineties, especially in the
nineties. While the share of services in India's GDP increased by 21 per
cent points in the 50 years between 1950 and 2000, nearly 40 per cent of
that increase was concentrated in the nineties. While almost all service
sectors participated in this boom, growth was fastest in communications,
banking, hotels and restaurants, community services, trade and business
services. One of the reasons for the sudden growth in the services
sector in India in the nineties was the liberalisation in the regulatory
framework that gave rise to innovation and higher exports from the
services sector.
The boom in the services sector has been relatively "jobless".
The rise in services share in GDP has not accompanied by proportionate
increase in the sector's share of national employment. Some economists
have also cautioned that service sector growth must be supported by
proportionate growth of the industrial sector, otherwise the service
sector grown will not be sustainable. In the current economic scenario
it looks that the boom in the services sector is here to stay as India
is fast emerging as global services hub.
Note: The above information was last updated on 21-07-2007
