SERVICE SECTOR

IN

INDIA
ECONOMY
 PRIMARY SECTOR

 SERVICE SECTOR

 SECONDARY SECTOR
TERTIARY SECTOR
 The tertiary industry is split into two main categories.
 The first is made up of companies that are in the
business of making money, such as those in the financial
industry.
 The second comprises the non-profit segment, which
includes services such as state education.
 From cutting the grass to providing health care to
delivering packages, service sectors play an integral part
in the daily activities of millions of people and
businesses.
 These services may offer an improved standard of living,
professional and technical expertise, or other essential
services.
 The providers of such services involve all sectors of the
economy including for-profit private businesses, non-
profit organizations and various levels of government.
CONSTITUENTS OF SERVICE SECTOR
This segment of the economy provides services to its
consumers. This includes a wide range of businesses
including financial institutions, schools, transports and
restaurants.
 Trade

 Hotels and Restaurants

 Railways

 Communication (Post, Telecom)

 Banking

 Insurance

 Real Estate
 Business Services
 Public Administration;

 Defence

 Personal Services

 Community Services

 Other Services

 Dwellings,

 Other Transport & Storage

GROWTH IN RECENT YEARS
 The services sector contributed
nearly 63 % of the GDP in 2007-
08.

 This sector accounts for 59.6 per

cent of the overall average
growth in GDP in the last eight
years between 2000-01 and
2007-08.
STRUCTURAL SHIFT:
 GROWTH RATES OF REAL GDP
(BASE YEAR:1999-2000)
(PERCENT)

Services sector 2000-01 to 2003-04 2004-05 2005-06

2002-03
(Average)
1. Trade, Hotels, 8.5 12 9.7 11
Restaurants,
Transport, Storage
and Communication

2 .Financing, 6.5 4.5 9.2 9.7

Insurance, Real Estate
and Business Services
3 .Community, Social 4.1 5.4 9.2 7.8
and Personal Services

4. Construction 5.9 10.9 12.5 12.1

GROWTH IN SERVICE SECTORS
 Indicators of service sector Activity:
(growth rates in percentage:)
Sub-sector 2005 2006

Tourist Arrivals
23.7 11.7
Railway revenue earning freight traffic 14.9 11.0
New cell phone connections 7.6 167.0
Cargo handled at major ports 15.8 -2.0
Civil aviation
a) Export cargo handled 12.0 10.1
b) Import cargo handled 14.6 19.9
c) Passengers handled at international terminals 9.9 16.2
d) Passengers handled at domestic terminals 19.2 54.0
Roads: Upgradation of Highways – –
Cement 8.2 10.7
Steel 7.6 6.0
Aggregate deposits 11.9 22.3
Non-food credit 31.6 38.4
Central Government expenditure 5.6 2.3
…..CONTD
 Software Services - 33%

 Business Services – 82.4%

 Engineering Services & product Exports – 23%

 Community Social & Personal Services – 90%

5 KEY INDUSTRIES

 IT
 Telecom

 Retailing/Real Estate

 Banking

 Insurance
5 KEY COMPANIES

 BIRLA INSURANCE
 TCS

 BSNL

 SBI

 RETAILING
RETAIL SECTOR
BSNL
 There is no telecom operator in india to beat its reach
with wide network giving service to every nook and
corner of the country.
 Within a span of 5 years from its formation in 2000 ,it
became one of largest service sector in india
 Bsnl has been making operating losses in the past two
years. Biggest culprit in bsnl has been the outrages
wage bill of Rs 10,000 crore on revenue of Rs 40,000
crore
40000
35000
30000
25000
20000
15000
10000 Net Revenue
5000 Net Profit
0
-5000
-10000
BIRLA INSURANCE
 Birla sun life insurance is amongst the top 5 asset mgmt
companies in India with avg asset under
management(AUM) of Rs 47,096 crores as on march
31 ,2009.
 BSL insurance set a new milestone by crossing the
land mark fig of Rs 10,000 crores in AUM.
 BSLI’s specially designed product for the rural market
“bima kavach yojana” has been a run away success .
 BSLI through its distribution partner has reached close
to 37,500 villages across nine states in the country .
STATE BANK OF INDIA
 INDIAN banking sector passed through a difficult
phase during the past year ,under such situation SBI
performance has been outstanding.
 Net profit of Rs 9,121 crore- 2008-09

 Net profit of Rs 6,729 crore in 2007-08

 SBI has assets base of $250 billion and $195 billion in

deposits.
 FUTURE

OF

SERVICE SECTOR
 Services
Real GDP per capita growth
contributing
to GDP

Share of service sector in India’s GDP was 54% . ( India has witnessed
average annual growth rates 6.2% (for the period 1992-2005).
Also called has ‘India’s services revolution’.
  Rs crores  Credit Debit Net
Invisibles (a+b+c) 537769 288334 249435
a) Services 367111 219307 147804
  i) Travel 42477 32726 9751
  ii) Transportation 36481 40029 -3548
  iii) Insurance 5425 2898 2527
  iv) Govt n.i.e. 1235 1888 -653
  v) Miscellaneous 281493 141766 139727
  of which: Software services 141356 11266 130090
  Business services 105895 90960 14935
  Financial services 14413 8234 6179
  Communication services 9332 3252 6080
b) Transfers 130159 6537 123622
  i) Official 2877 1890 987
  ii) Private 127282 4647 122635
c) Income 40499 62490 -21991
  i) Investment income 38707 58144 -19437
  ii) Compensation of employees 1792 4346 -2554
 Going forward, the services sector could potentially see slower
growth, due to the decline in overall business prospects, according
to the CII report.

 'Going forward, the Indian economy is likely to be overwhelmingly

dependent on the growth of services. More than 70 percent of India's
incremental GDP and 60 percent of new jobs over the next five years
are expected to be generated by services.'

 Going forward, service providers are likely to see their sales cycles
lengthen; witness a slow or delayed ramping up of projects
according to NASSCOM report.