Page 32 - DMGT522_SERVICES MANAGEMENT

Unit 2: Emergence of the Services Economy
Ashwani Panesar, Lovely Professional University

Unit 2: Emergence of the Services Economy Notes

CONTENTS
Objectives
Introduction
2.1 Service Concept

2.2 Overview of the Indian Economy
2.3 Importance of Services in the Economy
2.4 India’s Services Sector
2.5 Performances of Some Major Services

2.6 Challenges and Outlook
2.7 Summary
2.8 Keywords
2.9 Review Questions

2.10 Further Readings

Objectives

After studying this unit, you will be able to:
Elaborate the overview of the Indian economy
Explain the importance of services in the economy
Discuss the services sector in the Indian economy
Describe the various performance of some major services
Introduction

The services sector has been a major and vital force steadily driving growth in the Indian
economy for more than a decade. The economy has successfully navigated the turbulent years of
the recent global economic crisis because of the vitality of this sector in the domestic economy
and its prominent role in India’s external economic interactions. The services sector covers a
wide range of activities from the most sophisticated Information Technology (IT) to simple
services provided by the unorganised sector, such as the services of the barber and plumber.
National Accounts classification of the services sector incorporates trade, hotels and restaurants;
transport, storage, and communication; financing, insurance, real estate and business services;
and community, social, and personal services. In World Trade Organization (WTO) and Reserve
Bank of India (RBI) classifications, construction is also included.

2.1 Service Concept

One of the first to define services was the American Marketing Association, which, as early as in
1960, defined services as “activities, benefits, or satisfactions which are offered for sale, or
provided in connection with the sale of goods.” This definition took a very limited view on
services as it proposed that services are offered only in connection with the sale of goods.

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