prese.monday 9 -2010

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DEPARTMENT OF MANAGEMENT

BIT MESRA

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SERVICE SECTOR

IN

INDIAN ECONOMY

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INTRODUCTION

According to KOTLER, SERVICE is any kind of performance that one party can offer to another that isessentially intangible and does not result in the ownership

of anything

In 1989 Quinn, Baruach and Daquette considered servicesector as “It includes all economic activities whose output

is not a physical product or construction, is generally consumed at the time it is produced and provides added value in forms that are essentially intangible”.

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The services are intangible,heterogeneous, inseparable andperishable. The service sector is an integration of thesecomponents, involving a large number of staff working forsatisfying customers.

The Service sector encompasses a diverse and complexrange of organisations and enterprises. These include:

National and Local government services

Non-Profit Organisations

Profit Services

INTRODUCTION CONTD……

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CHARACTERISTICS OF SERVICE SECTOR

INDUSTRIES An organisation normally sell services directly to the

user

The Service Company has several contacts with its

users. It has to be prepared to provide its service when the

user needs it.

It has to complete its assignments within the period

desired by the customer. It cannot be stored or transported.

Many services include delivery of intangible products.

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CLASSIFICATION OF A SERVICE ORGANIZATION

S.NO. SERVICE OFFERED ORGANISATIONS

1. Energy supply Gas supply, nuclear power plant

2. Transportation Air, Sea

3. Communication Telephone, radio4. Healthcare Hospitals, clinics

5. Social Services Fire brigade, police

6. Financial Services Banks, stock markets

7. Repair and delivery Repair services, courier8. Education Schools, colleges

9. Government and law Political system,police

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Services: Before and after

Liberalization:

Since 1960s, there has been a steadydecline in the contribution of agriculture

and primary sector to Gross DomesticProduct (GDP), and its place has beentaken by service based enterprises.

Thus, service sector encompasses the

major areas of trade, finance, insurance,communications, public utilities,transportation, health care, education,

business and personal services.

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Services: Before and after Liberalization Cont..

Before liberalization Services was the residual sector drawing refugeesfrom agriculture

Between 1996 and 2005- the triple impact of India’s externalliberalization, domestic economic reforms and the rise of a global

market for skilled services facilitated by information technology makesitself felt, share of services in India’s GDP grew from just over 40% toabout 54%.

Rapid growth of services in the economy, specially, in the externalsector- facilitates less dependent on the India’s relatively poorinfrastructure than manufacturing.

China, which has a far higher proportion of its economy inmanufacturing, and has emerged as the global hub for laborintensive manufacturing, has much better infrastructure thanIndia. China’s better infrastructure facilitated entrepreneurship inthe manufacturing sector.

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Service Sectors in India

Trade Hotels and Restaurants Railways Other Transport & Storage Communication (Post, Telecom) Banking Insurance Dwellings, Real Estate Business Services

Public Administration, Defense. Personal Services Community Services Other Services

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Hotel Industry•

Hotel industry has seen boom in the recent years.•Related closely with the tourism industry

•Government campaign has further inculcated growth in the hotelindustry

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Telecom industry The telecom industry is one of the fastest growing

industries in India

India has nearly 200million telephone line making itthe third largest network in the world after China and

USA. With a growth rate of 45%,Indian telecom industry has

the highest growth rate in the world.

Telecommunication sector in India can be divided into2 segments 1. Fixed Service Provider(FSPs)

2.Cellular Services

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Health careThe Indian Health sector consists of

Medical care providers like physicians, specialist

clinics, nursing homes, hospitals. Diagnostic service centers and pathology laboratories.

Medical equipment manufacturers.

Contract research organizations (CRO's),

pharmaceutical manufacturers Third party support service providers (catering,

laundry).

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Aviation industry

Aviation industry in India is one of the fastest growingaviation industries in the world.

Entry private giant in the aviation industry.

Several steps have been taken to upgrade Aviation industry 1.Two of India’s largest airports-Mumbai and New Delhi were privatized

2.Two greenfield airports are coming up at Bangaloreand Hyderabad in Southern India.

3. Investments are pouring into almost all aspects of theindustry including aircraft maintenance, pilot training andair cargo services. The future prospects of Indian aviationsector look bright

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Entertainment Over 300 national, regional and local channels

Third largest television market in the world

behind only china and the USA World's biggest movie industry in terms of the

number of movies produced

Rapid development of state-of-the-art studios andpost production facilities

Estimated 6 million people earn their livelihood

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Finance & Banking The growth of financial sector in India at

present is nearly 8.5% per year

The financial sector in India had an overall growthof 15%, which has exhibited stability over the lastfew years although several other markets acrossthe Asian region were going through a turmoil

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WHO OR WHAT IS THE DIRECT RECIPIENT OF SERVICE? WHO OR WHATIS THE DIRECT RECIPIENT OF THE SERVICES?

WHATIS THE NATURE OF THESRVICE ACT? PEOPLE POSSESSIONS

TANGIBLE ACTIONS PEOPLE PROCESSING(SERVICESDIRECTED AT PEOPLE’S BODIES):

PASSENGER TRANSPORTATIONHEALTH CARE

LODGINGBEAUTY SALONSPHYSICAL THERAPY FITNESS CENTRESRESTAURANT/BARSBARBERSFUNERAL SERVICES

POSSESSIONPROCESSING(SERVICESDIRECTED AT PHYSICALPOSSESSIONS):

FRIEGHT TRANSPORTATIONREPAIR AND MAINTENANCE

WAREHOUSING/STORAGEOFFICE CLEANING SERVICESRETAIL DISTRIBUTIONLAUNDRY AND DRY CLEANINGREFUELINGLANDSCAPING/GARDENINGDISPOSAL/RECYCLING

INTANGIBLE ACTIONSMENTAL STIMULUSPROCESSING(SERVICES DIRECTED ATPEOPLE’S MINDS):

ADVERTISING/PR ARTS AND ENTERTAINMENTBROADCASTING/CABLEMANAGEMENT CONSULTINGEDUCATIONINFORMATION SERVICESMUSIC CONCERTSPSYCHOTHERAPY RELIGION

VOICE TELEPHONE

INFORMATIONPROCESSING(SERVICESDIRECTED AT INTANGIBLE

ASSETS):

ACCOUNTINGBANKINGDATA PROCESSINGDATA TRANSMISSIONINSURANCELEGAL SERVICESPROGRAMMINGRESEARCHSECURITIES INVESTMENTSOFTWARE CONSULTING

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Growing Trends of Service Sector There is a tremendous growth achieved by the Indian Economy in Service

Sector. The excess growth achieved in service sector may temporarily benefitthe economy by providing employment opportunities to millions of people.

(Data in %)

Year Agriculture &

Allied Sector

Industry Services

1950-511960-611970-711980-811990-912000-012005-062008-09

55.150.644.337.731.423.919.517.0

10.613.115.417.419.820.019.418.5

34.035.940.244.648.856.161.164.5

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Distribution of Various Services output

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A statistics concerning the growth of

India's service sectors are listed below: The software services in Indian economy increased by

33% which registered a revenue of USD 31.4 billion

Business services grew by 82.4%

Engineering services and products exports grew by 23%

and earned a revenue of USD 4.9 billion

Services concerning personal, cultural, and recreational

had a growth of 96%

Financial services had a rise of 88.5%

Travel, transport, and insurance grew by 23%

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Overview and Recent

Developments India seen in last 10 odd years as the emerging

professional services hub of the world

India’s competitive edge in professional services is

compared with China’s prowess as a low cost globalmanufacturing hub.

The services sector scenario in India is complex

characterized by uneven development in different

types of services and across regions.

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Economic Prospect of India’s

Service Sector1. Growth in high-end services like IT–ITES has the

potential to generate significant spin-offs.

2. Financial services and transport infrastructure can beexpected to expand capabilities and improve productivity.

3. The services sector has a major role to play in absorbingIndia’s rapidly growing labour force.

4. Improvements in the delivery of education and healthcareservices, particularly in rural areas, are vital forsustainable growth.

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According to recent estimation, forecastination, itwas visualized that by March-April, 2006 thecontribution of Service sector to the India‟s GDP would

be at 55%. This makes clear that we are living in“Service Imperative Era”. The enormous growth

potential in the service sector has lead to the great

visualization of „Developed India – 2020‟ by manyIndians.

CONCLUSION

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CONCLUSION CONT….. ‘Information Technology and IT Enabled Services can do for India what

automotives did for Japan and oil for Saudi Arabia.’ -McKinsey & Company

If the current decade gave india the confidence to dream big the coming

one may well decide if those dreams could ever become a reality andperhaps even define what india’s future may be .On the surface as we enterin 2010 india has reason to be cautiously optimistic on the economicfront.investment is up,industrial output continues to grow steadly.If notspectacularly and domestic capital formation and international capitalflows have picked up momentum again.

By the end of 2019 india may be well have consuming class over 800 millionpeople and over all consumer spending toping $ 1.2 trilion,creating newmulti billion dolor industries and businesses at that size of economy indiawill be among the top five market for most major global corporations andcertainly still remain among the most promising ones for the furthergrowth.

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REFERENCES

SERVICE MARKETING

- PHILIP KOTLER

SERVICE MARKETING

- R.P. MOHANTI & DR. R.R. LAKHE

LIVING INDIA: A FORTNIGHT VOL. 6 JAN 2010

BANKING CHINTAN ANUCHINTAN YEAR – 21 VOL. NO. 04 JUL.-SEP. 2009.

CENTRAL STATISTICAL OFFICE - DATA 2009

NATIONAL SAMPLE SURVEY ORGANIZATION2009

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ANUPAM KR. GAURAV (CO-ORDINATOR)(MBA/1099/2010)

HRISHIKESH KR. SINGH (MBA/1065/2010)RAVI KR. GOYAL (MBA/1061/2010)MONIKA SINGH (MBA/1109/2010)

MANJU (MBA/1111/2010)SINDHU CHAUHAN (MBA/1096/2010)SWATI (MBA/1100/2010

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prese.monday 9 -2010