contribution of service sector in indian economy

8/4/2019 Contribution of Service Sector in Indian Economy

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Submitted by-

Rashmi Agrawala


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INDIA IS A FAST DASHING TOWARDS ITS DREAM

OF CONVERSION INTO DEVELOPED COUNTRY

BY 2020.

Many of the highly paid software wizards inthe globe have their origin in india,and

hence the emergence service sector has

taken a steep positive slope in india.

A well developed country need a wellestablished service sector.


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Since 1960,there has been a steady decline

in the contribution of agriculture n primary

sector ti GDP, its place has been taken by

service based enterprises. Thus service sector encompasses the trade

,finance,insurance,communication,public

utilities,transportation,education,business,

and personal service.


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The service sector now accounts for more thanhalf of India's GDP: 51.16 per cent in 1998-99.

This sector has gained at the expense of boththe agricultural and industrial sectors through

the 1990s. The rise in the service sector's share in GDP

marks a structural shift in the Indian economyand takes it closer to the fundamentals of adeveloped economy (in the developedeconomies, the industrial and service sectorscontribute a major share in GDP whileagriculture accounts for a relatively lowershare).
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he service sector's share has grown from

43.69 per cent in 1990-91 to 51.16 per cent

in 1998-99.

In contrast, the industrial sector's share inGDP has declined from 25.38 per cent to

22.01 per cent in 1990-91 and 1998-99

respectively. The agricultural sector's share

has fallen from 30.93 per cent to 26.83 percent in the respective years.


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Within the services sector, the share oftrade, hotels and restaurants increased from12.52 per cent in 1990-91 to 15.68 per centin 1998-99.

The share of transport, storage andcommunications has grown from 5.26 percent to 7.61 per cent in the years underreference. The share of construction has

remained nearly the same during the periodwhile that of financing, insurance, realestate and business services has risen from10.22 per cent to 11.44 per cent.


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Some economists caution that if the service

sector bypasses the industrial sector,

economic growth can be distorted.

They say that service sector growth must besupported by proportionate growth of the

industrial sector, otherwise the service sector

grown will not be sustainable.

It is true that, in India, the service sector'scontribution in GDP has sharply risen and

that of industry has fallen (as shown above).


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The fact that the service sector now

accounts for more than half the GDP

probably marks a watershed in the evolution

of the Indian economy.


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contribution of service sector in indian economy

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