Service Sectors in India (1)

8/6/2019 Service Sectors in India (1)

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Service sectors in IndiaService sectors in India&&

Its role in Economic DevelopmentIts role in Economic Development



Agenda Agenda

Introduction to Service sectors.Introduction to Service sectors.Indian economyIndian economy ± ± AnalysisAnalysis

Analysis of Specific Services in IndiaAnalysis of Specific Services in IndiaRole of service sectors in developmentRole of service sectors in developmentConclusionConclusionFood for mindFood for mind



Introduction to Service sectors.Introduction to Service sectors.

Service Sector or the "Service Sector or the " Tertiary Sector Tertiary Sector " of the economy covers a" of the economy covers awide gamut of activities. The various sectors that combine togetherwide gamut of activities. The various sectors that combine togetherto constitute service industry in India are:to constitute service industry in India are:

� TradeTrade� Hotels and RestaurantsHotels and Restaurants� RailwaysRailways� Other Transport & StorageOther Transport & Storage� Communication (Post, Telecom)Communication (Post, Telecom)� BankingBanking� InsuranceInsurance

� Dwellings, Real EstateDwellings, Real Estate� Business ServicesBusiness Services� Public Administration; DefencePublic Administration; Defence� Personal ServicesPersonal Services� Community ServicesCommunity Services� Other ServicesOther Services



Analysis of Specific Services in India Analysis of Specific Services in India



Analysis of Specific Services in India Analysis of Specific Services in India



Size of Specific Services in IndiaSize of Specific Services in India



Growth Rates and Sectoral Shares

of Different Services in India

Sector Activities IncludedSector Activities Included

Avg.Avg.GrowthGrowthRate inRate in

19501950± ±7979(Share in(Share in

1980)1980)



1990)1990)



2000)2000)


20002000- -0606(Share in(Share in

2006)2006)

TradeTrade 4.8 (10.6)4.8 (10.6) 5.7 (11.2)5.7 (11.2) 7.0 (13.1)7.0 (13.1) 7.7 (13.9)7.7 (13.9)

Hotels & Restaurants:Hotels & Restaurants: 4.8 (0.81)4.8 (0.81) 5.9 (0.89)5.9 (0.89) 9.1 (1.3)9.1 (1.3) 9.2 (1.5)9.2 (1.5)

RailwaysRailways 4.2 (1.6)4.2 (1.6) 4.1 (1.5)4.1 (1.5) 3.3 (1.2)3.3 (1.2) 6.7 (1.2)6.7 (1.2)

Transport by other means:Transport by other means:Road, water, air transport,Road, water, air transport,

6.3 (3.6)6.3 (3.6) 6.7 (4.0)6.7 (4.0) 6.9 (4.6)6.9 (4.6) 8.7 (5.3)8.7 (5.3)

StorageStorage 5.5 (0.14)5.5 (0.14) 2.6 (0.11)2.6 (0.11) 2 (0.1)2 (0.1) 3.1 (0.1)3.1 (0.1)

CommunicationCommunication 6.7 (0.66)6.7 (0.66) 5.8 (0.7)5.8 (0.7) 13.8 (2.0)13.8 (2.0) 22.8 (4.9)22.8 (4.9)

BankingBanking 7.2(1.9)7.2(1.9) 10.0(3.3)10.0(3.3) 10.6 (5.0)10.6 (5.0) 7.6 (5.6)7.6 (5.6)

InsuranceInsuranceLife, postal life, nonLife, postal life, non- -lifelife

7.1 (0.55)7.1 (0.55) 9.6 (0.62)9.6 (0.62) 2.2 (0.61)2.2 (0.61) 14.3 (1.1)14.3 (1.1)



Sector Activities IncludedSector Activities Included



1980)1980)



1990)1990)



2000)2000)


20002000- -0606(Share in(Share in

2006)2006)

Dwellings, real estateDwellings, real estate 2.6 (4.5)2.6 (4.5) 7.2 (5.8)7.2 (5.8) 4.8 (5.2)4.8 (5.2)2.5 (3.9)2.5 (3.9)

Business services:Business services: Renting of Renting of machinery, computer related services,machinery, computer related services,accounting, research etc.accounting, research etc.

4.2 (0.42)4.2 (0.42) 9.1 (0.7)9.1 (0.7) 15.9 (2.1)15.9 (2.1) 17.3 (3.6)17.3 (3.6)

Legal servicesLegal services 2.6 (0.13)2.6 (0.13) 8.1 (0.2)8.1 (0.2) 5.6 (0.2)5.6 (0.2) 3.6 (0.14)3.6 (0.14)

Public administration, defencePublic administration, defence 6.1 (5.7)6.1 (5.7) 6.7 (6.4)6.7 (6.4) 5.9 (6.7)5.9 (6.7) 4.0 (5.6)4.0 (5.6)

Personal and Other services:Personal and Other services: 1.4 (2.4) 1.4 (2.4) 2.5 (1.9)2.5 (1.9) 4.7 (1.8)4.7 (1.8) 5.9 (1.7)5.9 (1.7)

Community servicesCommunity servicesEducation, research, scientific, medical,Education, research, scientific, medical,health, religious and other communityhealth, religious and other community

4.8 (4.6)4.8 (4.6) 7.5 (5.1)7.5 (5.1) 7.5 (6.3)7.5 (6.3) 6.9 (6.2)6.9 (6.2)

Growth Rates and Sectoral Shares

of Different Services in India



R ole of service sectorsR ole of service sectors

in Economic Developmentin Economic Development� Increasing Share in the GDPIncreasing Share in the GDP

-- Service Sector share in GDP was 55.1% in 2006Service Sector share in GDP was 55.1% in 2006- -2007.2007.

� Providing more EmploymentProviding more Employment-- Employment increased from 17.3% of working populationEmployment increased from 17.3% of working population

in 1951 to 22.5% in 2001.in 1951 to 22.5% in 2001.

� Providing support to other services and industries in theProviding support to other services and industries in theform of financial, support, transport, storage etc.form of financial, support, transport, storage etc.

� Major contributions to Export industry; includes travel,Major contributions to Export industry; includes travel,transportation, insurance, software, agency services,transportation, insurance, software, agency services,royalties, management services etc.royalties, management services etc.

--In Export the services accounted for 35% of total Exports inIn Export the services accounted for 35% of total Exports inIndia in 2004India in 2004- -2005.2005.



C onclusionC onclusion

� Modern service sector jobs are now migrating fromModern service sector jobs are now migrating fromIndia¶s urban centres to its small towns and ruralIndia¶s urban centres to its small towns and ruralvillages, creating employment for semivillages, creating employment for semi- -skilled workers.skilled workers.

� Sustaining economic growth and raising livingSustaining economic growth and raising livingstandards, thus, will benefit from shifting labour out of standards, thus, will benefit from shifting labour out of agriculture into modern services as well asagriculture into modern services as well asmanufacturing and not just into the latter.manufacturing and not just into the latter.

� It is possible that the size and growth of education,It is possible that the size and growth of education,health, personal services, business service and otherhealth, personal services, business service and otherservices are currently being underestimated in India.services are currently being underestimated in India.



F ood for MindF ood for Mind

Service sector Cannot grow in isolation.Service sector Cannot grow in isolation.

Though Service sector has high growth it still hasThough Service sector has high growth it still haslow share of employment in india, compared tolow share of employment in india, compared torest of the world and china.rest of the world and china.

It needs more finance.It needs more finance.

To grow service sector more we will need betterTo grow service sector more we will need betterinfrastructure like roads, telecom, electricity.infrastructure like roads, telecom, electricity.The rise in services share in GDP has notThe rise in services share in GDP has notaccompanied by proportionate increase in theaccompanied by proportionate increase in thesector's share of national employment.sector's share of national employment.



R eferencesR eferencesGraphs, Statistics taken from :Graphs, Statistics taken from :- -http://www.icrier.org/pdf/Working%20Paper%20249.pdf http://www.icrier.org/pdf/Working%20Paper%20249.pdf

http://theviewspaper.net/service_sector_growth_in_india_and_china/http://theviewspaper.net/service_sector_growth_in_india_and_china/

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Service Sectors in India (1)