Comparison Between India and China on Service Sector

Topics: Economy, Industry, Tertiary sector of the economy Pages: 6 (1995 words) Published: March 15, 2012


Service Sector in India today accounts for more than half of India's GDP. According to data for the financial year 2011-2012, 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 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.

Service Sector of Indian Economy
There has been a 9 percent growth in the Indian economy during 2011-2012 as against a rise of 8 percent in the same during 2010-11. During this growth in Indian economy, the service sector witnessed a rise of 11 percent in the year 2011-2012 against the 9.8 percent growth in 2010-2011. The service sectors of Indian economy that have grown faster than the economy are as follows: * Information Technology (the most leading service sectors in Indian economy) * IT-enabled services (ITeS)

* Telecommunications
* Financial Services
* Community Services
* Hotels and Restaurants
There has been a 13 percent hike in the service sectors of trade, hotels, transport and communication in India's economy as compared to the 10.4 percent rise in the previous year. The financial services that comprise of banks, real estate, insurance, and business services witnessed a rise of 11.1 percent during 2011-12 against the 10.9 percent growth in the previous year. Service sectors including community, social, and personal services experienced a growth of 7.8 percent during 2011-12 as against 7.7 percent growth in the previous year. The service sector of India has also witnessed a remarkable rise in the global market apart from the Indian market. It has experienced a rise of 2.7 percent in 2011 from that of 2 percent in 2010. The broad-based services in the trade...
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