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Topic:    INDIA'S SERVICE SECTOR 
Author: Texpro (India)'s Views
Date:    27th March 2006
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Economics experts and various studies conducted across the globe envisage India and China to rule the world in the 21st century. For over a century the United States has been the largest economy in the world but major developments have taken place in the world economy since then, leading to the shift of focus from the US and the rich countries of Europe to the two Asian giants- India and China.

Since independence Indian economy has thrived hard for improving its pace of development. In the recent past, high growth rates in Industry & service sector, which constitute a very heterogeneous economic category and a benign world economic environment provided a backdrop conducive to the Indian economy & as India padding up for becoming an economic superpower, various socio-economic reforms have taken place and steps have been taken for overcoming institutional and infrastructure bottlenecks inherent in the system. Availability of both physical and social infrastructure is central to sustainable economic growth. Services are not tangible, making it difficult for potential customers to understand what they will receive and what value it will hold for them.

India is currently gripped with services fever & the reason for the growth in the services sector in India is the liberalization in the regulatory framework that gave rise immense opportunity for innovation and higher exports from the services sector. India scores well on macro-economic conditions also. Ultimately, improvements in the services sector will drive changes in the manufacturing sector. Strong and consistent emphasis on self-reliance in its economic development Programme over the last five decades has enabled India to build up a pool of professionals in diversified fields. India's international-class manpower, which is a sizeable part of this workforce of professionals, makes up the country’s growing consultancy sector, which is offering its accumulated experience and expertise at home and abroad. By virtue of having the second largest scientific and technical manpower in the world, India has been providing varied consultancy and other services globally. There is still immense scope for India to undertake project and management consultancy.

The hype about India's newfound services prowess continues unabated. The service sector now accounts sizeable portion of India's GDP. Rapidly, the quality and complexity of the type of services being marketed is on the rise to match worldwide standards. Whether it is financial services, software services or accounting services, this sector is highly professional and provides a major impetus to the economy. Services sector with multiplicity of services having strong linkages to manufacturing activities, construction, transport and communication, generation and distribution has provided momentum to overall economic activities while playing a complimentary role. Services sectors have also created and invented innovative tools to satisfy the customers. Phone cards, credit cards; ATM facilities and other customer friendly tools and services are some of the examples.

The retail industry, which is a sunrise service sector, holds massive potential and opportunities for growth. The Indian retail market estimated to be around Rs.600,000 crores is substantially large and is growing at about 10 per cent. The other segment of service sector, which is fast emerging, as a sunrise sector is the Entertainment Industry covering film, music, broadcast, television and live entertainment. In recent times, ‘software development and IT enabled services’ have emerged as a niche opportunity for India in the global context. The Government of India is taking all necessary steps to make India, a Global Information Technology Superpower and a front-runner in the age of Information Revolution.

Although India occupies only 2.4% of the world's land area, it supports over 15% of the world's population. Only China has a larger population. Almost 40% of Indians are younger than 15 years of age. About 70% of the people live in more than 550,000 villages, and the remainder in more than 200 towns and cities. Coupled with the population, India's economic performance in the last few years has raised eyebrows, which has prompted a re-assessment about India.

India could be considered as one of the Emerging Future Superpowers due to a few reasons like - a growing skilled workforce and one of the fastest growing economies (especially in the service sector and software industry) & will have the ability to influence events and project power on a worldwide scale. Superior economic power is characterized by access to raw materials, volume and productivity of the domestic market, a leading position in world trade as well as global financial markets, innovation, and the ability to accumulate capital. The standard of living in India is constantly improving & is fast on way to become a large and globally important consumer economy.
 

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