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Services Sector

The service industry forms a backbone of social andeconomic development of a region. It has emerged as

the largest and fastest-growing sectors in the worldeconomy, making higher contributions to the globaloutput and employment. Its growth rate has beenhigher than that of agriculture and manufacturingsectors. It is a large and most dynamic part of theIndian economy both in terms of employmentpotential and contribution to national income. Itcovers a wide range of activities, such as trading,transportation and communication, financial, realestate and business services, as well as community,social and personal services. In India, services sector,

as a whole, contributed as much as 68.6 per cent of the overall average growth in gross domestic product(GDP) between the years 2002-03 and 2006-07.

The most important services in the Indian economyhas been health and education. They are one of thelargest and most challenging sectors and hold a keyto the country's overall progress. A strong and well-defined health care sector helps to build a healthyand productive workforce as well as stabilisepopulation.The 'Ministry of Health and FamilyWelfare' is responsible for implementation of variousprogrammes in the areas of health and familywelfare, prevention and control of majorcommunicable diseases as well as promotion of traditional and indigenous systems of medicines.Accordingly, it is carrying out measures likeNational health policy, implementing National RuralHealth Mission (NRHM) in different States,conducting surveys and studies, etc. While,education strongly influences improvement in health,hygiene and demographic profile. The 'Ministry of Human resource Development' is involved ineradicating illiteracy from the country. It isconcerned with universalisation of elementaryeducation, achieving full adult literacy, laying downof National Policy on Education, meeting needs of secondary and higher education for all, etc. India hasachieved impressive demographic transition owing tothe decline of crude birth rate, crude death rate, totalfertility rate and infant mortality rate as well asgained high literacy rate in the country.

The era of economic liberalisation has ushered in a

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rapid change in the service industry. As a result, overthe years, India is witnessing a transition fromagriculture-based economy to a knowledge-basedeconomy. The knowledge economy creates,disseminates, and uses knowledge to enhance its

growth and development. One of the majorfunctional pillars of this economy is InformationTechnology (IT) and IT-enabled services (ITeS)industry. The 'Department of InformationTechnology' has been making continuous efforts tomake India a front-runner in the age of Informationrevolution. IT continues to be a dominating sector inthe overall growth of the Indian industry. A largenumber of Indian software companies have acquiredinternational quality certification. Several policieshave also been framed on the key issues of ITinfrastructure, electronic governance as well as ITeducation.

Another major and upcoming service industry hasbeen media and entertainment. It is basically anintellectual property-driven sector with small to largeplayers spread throughout the country. It covers film,music, radio, broadcast, television and liveentertainment. It plays a significant role in creatingpeople's awareness about national policies andprogrammes by providing information and educationto all. The 'Ministry of Information andBroadcasting' is responsible for formulation andadministration of the rules, regulations and lawsrelating to media industry. Besides, retailing hasbeen one of the fastest growing service sector both interms of turnover and employment. Many nationaland global players have been investing in the retailsegment and are making all efforts to further expandthe sector. Out of the total retail outlets in thecountry, most of them are related to food items.

However, to supplement the achievements and meetthe shortfalls in all the sub-sectors of the serviceindustry, travel and tourism sector has to bedeveloped in a sustainable manner. Being one of thelargest industry in terms of gross revenue and foreignexchange earnings, it stimulates growth andexpansion in other economic sectors like agriculture,horticulture, poultry, handicrafts, transportation,construction, etc. as well as gives momentum togrowth of service exports. It is a major contributor to

the national integration process of the country aswell as preserver of natural and cultural

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environments. The 'Ministry of Tourism' has beenundertaking several policy measures and incentivesso as to boost the sector such as the announcement of the National Tourism Policy.

All this shows that services hold immense potentialto accelerate the growth of an economy and promotegeneral well-being of the people. They offerinnumerable business opportunities to the investors.They have the capacity to generate substantialemployment opportunities in the economy as well asincrease its per capita income. Without them, Indianeconomy would not have acquired a strong anddominating place on the world platform. Thus,service sector is considered to be an integral part of the economy and includes various sub-sectors spreadall across the country.