Comparison of growth and development of

service sector in India China and Brazil

Service Sector The segment of the economy that provides

services to its consumers. This includes a wide range of businesses including financial institutions, schools, transports and restaurants.

Also known as "tertiary sector of industry" or "service industry/sector".

Growth - Economy• Since the early 1990s, the world has

witnessed the spectacular growth of the economies.

• India, china and Brazil have recently achieved economic growth in different ways.

• Average annual growth rate is • India - 6.2% • China - 10.2%• Brazil - 4.4 %

Economy

Agriculture( Primary )

Farming

Forestry

Fishery

Sectors

Contribution to Economy

AgricultureAgriculture Manufacturing Service

Various sectors that combine together to constitute service industry

• 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

Service Sector - History

1990

China – 34%

India – 42%

Brazil – 48 %

2004

China – 40%

India – 54%

Brazil – 59 %

GDP Share of Service Sector

GDP shares of service sector in India China and Brazil

Contribution of Industry to GDP China

Agri Industry

Mfg Industry

Service Industry

Contribution of Industry to GDP India

Service Industry

Manufacturing

Agri Industry2000 2010

Contribution of Industry to GDP Brazil

• Old Services – • petty trading, • domestic services, • catering and • hotel services.

• New services • Communications, • Business • Legal practice,• culture,• research • education.

Types of Services

Growth of service Sector

• The structure of the service sector in India, China and Brazil are very similar.

• It is still dominated by the traditional or old services, followed by business services (finance, insurance and real estate) and transport and communications.

Contd….

The new service sectors are catching up rapidly.

During 1999-2003, communication services achieved the strongest growth in these countries with a average annual rate of

23.89 % in India, 16.77 % in China 18% in Brazil.

Contd….

India

8.6%

12%

9 %

Education

Research

Real Estate

China

8.7%

9%

6 %

Brazil

Education , Research & Real Estate achieved the strongest growth in these countries with a average annual rate of

6%

4%

9 %

Output and Employment Shares• Output shares of the service sector in India, China

and Brazil have grown steadily since 1978.• The role of services in the Indian and Brazilin

economy is clearly more significant than that of services in the Chinese economy.

• Since 1990, India and Brazil’s service sector has grown faster with an annual rate of 7.5 % and than the manufacturing sector with an annual rate of 6.0 %

Output and Employment Shares• while in China the manufacturing sector has

outpaced the growth of the service sector with an average rate of growth of 12.1 % and 8.4 % respectively.

• The employment share of India and Brazil’s service sector has grown very slowly according to available statistics covering the period of 1983-1999.

• Though there absolute figures were much higher than China’s in the 1980s.

Output and Employment Shares• The employment share of China’s service sector

has been growing steadily since 1978 -1990. • As a result, China’s service sector has absorbed

relatively much more labour force than India and Brazil since the mid-1990s.

• In terms of creating new jobs, services have played a vital role in these economies.

Output and Employment Shares to GDP - India

Output and Employment Share to GDP - Brazil

Agri Industry Mfg Industry Service Industry

Male

Female

Total2000

2010

Output and Employment Shares to GDP - China

Mfg Industry

29% 49%

26%

Service Industry

18%

21%

Service Industry Agri Industry

49%

60%

Service Industry

2000 2010

Regional Variations• Development of the service sector has variations

across the regions in these countries.• Regional development in services follows the

national trend.• Service sectors at the regional level in India is

more developed than those of China and Brazil.• service sector is more important in developed

regions of these countries• Service sector plays an important role in regions

where the level of urbanization is high.

Service Sector In India• India stands out for the size and dynamism of its

services sector.• The contribution of the services sector to the

Indian economy is 55.2 per cent share in gross domestic product (GDP)

• Growing by 10 per cent annually, contributing to about a quarter of total employment, accounting

for a high share in foreign direct investment (FDI) inflows and over one-third of total exports

• (27.4 per cent export growth through the first half of 2010-11.

• In India, service sector has become a dominant contributor, such that the success in this regard has been called as

‘India’s services revolution’.• The Indian economy is the second fastest

major growing economy in the whole world with the growing rate of the GDP at 9.4% in 2006- 2007. The economy of India is the twelfth biggest in the world for it has the GDP of US$ 1.09 trillion in 2007.

Contd…..• The contribution of the Services Sector has increased very

rapidly in the India GDP for many foreign consumers have shown interest in the country's service exports. This is due to the fact that India has a large pool of highly skilled, low cost, and educated workers in the country. This has made sure that the services that are available in the country are of the best quality. The foreign companies seeing this have started outsourcing their work to India specially in the area of business services which includes business process outsourcing and information technology services. This has given a major boost to the Services Sector in India, which in its turn has made the sector contribute more to the India GDP.

CONCLUSION• Role of services in these economies has been rising

with China starting on a lower base.• Growth has mainly been driven by increasing

specialization of production, rising standard of living and accelerated urbanization in these societies.

• India’s service sector is the dominant contributor to GDP growth but employment absorption is not very high in this sector.

• China’s service sector is lagging behind.• Brazil also doing good in Service Sector