Page 36 - DMGT522_SERVICES MANAGEMENT

Unit 2: Emergence of the Services Economy

2. India continues to urbanise at a strong pace driven by a combination of up trending Notes
consumption, robust job creation and growing financial penetration, according to Morgan
Stanley’s proprietary AlphaWise City Vibrancy Index.

3. The Union Ministry of Science and Technology has selected three consortia that will
receive a grant of ` 125 crore (US$ 23.58 million) from the Centre.
4. Tata Consultancy Services (TCS) has been named as the world’s fourth most valuable
Information Technology (IT) services brand by leading global brand valuation company,
Brand Finance.
5. India’s clean energy sector continued to flourish in 2011, with private investment increasing
54 per cent to US$ 10.2 billion, placing the country at sixth position among the G-20
nations.
2.3 Importance of Services in the Economy

Service Sector of Indian Economy contributes to around 55 percent of India’s GDP during 2006-
07. This sector plays a leading role in the economy of India, and contributes to around
68.6 percent of the overall average growth in GDP between 2002-03 and 2006-07. There has been
a 9.4 percent growth in the Indian economy during 2006-07 as against a rise of 9 percent in the
same during 2006-07. During this growth in Indian economy, the service sector witnessed a rise
of 11 percent in the year 2006-07 against the 9.8 percent growth in 2005-06. 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 2006-07 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 2006-07 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 2006 from that of 2 percent in 2004. The broad-
based services in the trade sector have undergone a large-scale rise. A statistics concerning the
growth of India’s service sectors are listed below:

The software services in Indian economy increased by 33 percent which registered a
revenue of USD 31.4 billion

Business services grew by 82.4 percent
Engineering services and products exports grew by 23 percent and earned a revenue of
USD 4.9 billion

Services concerning personal, cultural, and recreational had a growth of 96 percent
Financial services had a rise of 88.5 percent
Travel, transport, and insurance grew by 23 percent

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