IMM Fostiima Business School

Project Report

Topic: Service sector – Is it

engine for growth

Date: 8th February, 2019

Submitted by:
Ayush Gupta (PGP20037)

Megha Mittal (PGP20079)

Mugdha Mathur (PGP20083)

Piyush Ranjan (PGP20098)

Prashant Rawat (PGP20104)

Tejas Singh Panwar (PGP20157)

ACKNOWLEDGEMENT

A work is never a work of an individual. I owe a sense of gratitude to the intelligence and
co-operation of those people who had been so easy to let me understand what I needed
from time to time for completion of this exclusive project.

I want to express my special gratitude towards Mr. K. L. CHAWLA lecturer (FBS),

International Marketing Management, for giving us such a unique project. Last but not
the least I would like to forward my gratitude to all the people who always endured me
and stood by me and without whom I could not have been envisaged the completion of
my project.

We are also thankful to all of our other classmates, well-wishers who gave their
magnanimous help and support to make it a relative easier affair.
EXECUTIVE SUMMARY

“The remarkable expansion of services worldwide led to the services being regarded as
an engine of growth and even as an important contributor of economic growth.”

Service Sector is also known as tertiary sector is essential for economic growth in any
economy including India. India’ services sector has shown rapidly growth since 1990s by
contributing to major share in nation’s GDP, TRADE and FDI inflows. Among other
sectors, it is the single largest contributor to economic growth of India. India ranked 9th
in overall GDP and 10th in services GDP.

A comparison of the services performance of the top 15 countries in the eleven year
period from 2001 to 2011, shows that increase in share of services in GDP is the highest
for India (8.1percentage points) followed by Spain.

This paper makes an analysis of Indian Services Sector through examining its growth and
contribution in the economy. To maintain and accelerate the growth and contributions
of this sector and to develop it as a true engine of economic growth, more investment in
physical infrastructure as well as human capital is required.
INTRODUCTION

In the path of economic development, it is well known fact that a country experiences a
structural shift. Firstly the primary sector dominates but when development process
starts, the contribution of the secondary sector rises in relation to the primary sector
which was initially a predominant sector, with industrialization the secondary sector
became a major contributor to the GDP followed by the tertiary and primary sector and
the economies transformed into developed nation in a period from 75 to 100 years.

But the case of India is different, since 1950s with the onset of economic development
India’s services sector has grown at a rapid rate compared to the growth of the
secondary sector. At that time of 1950s, the Indian economy showed structural
characteristics similar to most developed countries of today when they are embarked
on the process of industrialization. Agriculture contributed approximately 56% of GDP,
industry around 14% and services about 30% (1950-51). But between the period of
1950-1951 to 2009- 2010, the share of the agriculture sector in GDP fell from 55.9% to
14.6%, whereas that of the industrial sector rose from 14.3% to 28.1% and that of the
services sector rose from 29.8% to 57.3%.

Service sector is the single largest and fastest growing sector in India contributing more
to output and employment.

In India, the service sector has developed manifolds since 1991 when compared to
primary and secondary sectors which are downcast in the economy.

SERVICE SECTOR IN INDIA

India’s service sector is accounting for more than 55% to gross domestic product (GDP)
which is gradually increasing 10 % growth per annum and contributing around 25% to
total employment and having major allocation in FDI inflows and 33% of exports total
with an expected growth of 27.4 % in 2010-2011.

The services sector growth was significantly faster than the 6.6 per cent for the
combined agriculture and industry sectors annual output growth during the same
period.
India with a services sector share of 52 per cent in national GDP in 2009 and 55.2 per
cent in 2009-10 compares well even with the developed countries in the top 12
countries with the highest overall GDP.

The findings reveals that the performance of service sector such as communication,
transportation and storage was high with an growth of 15 % in 2009-10 when compared
to other sectors and hotels and restaurants where found to be negative growth rate in
the economy.

The findings of World Trade Organisation (WTO) reveals that India has maximum share
in net exporter of services over a period of 2006-07 to 2008-09 with an increase per
cent of GDP from 29.5 to 54 Billion Dollar when compared to other sectors in the
economy

The reasons behind the development of the services sector are increasing urbanization,
privatization, more demand for intermediate and final consumer services, availability of
quality services, etc.

Especially in the post-liberalization period, this sector accounts for around 60 per cent
share in the GDP, growing by 10 per cent annually, contributing to 28 per cent of total
employment, a high share in FDI inflows and over one-third of total exports in recent
years.

Classification of service sector:

The classification of the services sector consists of four major categories given by
Central Statistical Organization (CSO):

 Among 4 sectors, in first group, over the years hotels and restaurants were
positive in the year 2005-2006 and gradually they decline showing negative
growth with an -3.1 % and however, for trade it was positive growth.
 Social, Community and personnel services

Jurisdiction of service sector:

 Union List : Telecommunications, postal, broadcasting, financial services

(including insurance and banking), national highways, mining services
 State List :Healthcare and related services, real estate services, retail, services
incidental to agriculture, hunting, and forestry
 Concurrent List: Professional services, education, printing and publishing,
electricity.

Service sector: International comparison:

India with a services sector share of 52 per cent in national GDP in 2009 and 55.2 per
cent in 2009-10 compares well even with the developed countries in the top 12
countries with the highest overall GDP.
China’s contribution towards national GDP at 39.2 per cent is relatively low, though it is
ahead of India in absolute terms (as its overall GDP is more than three times that of
India).

Service sector components and their contributions:

Within services, two industries, hotels and restaurants and land transport, contribute
about half of the plant count.

A few other services such as education and health services, financial intermediation, and
other business services also feature prominently.

Within services, it is not surprising that computers and related activities record the
highest usage of computers and internet, with the usage of new technologies in
organized services always being considerably higher than that in unorganized services.

Other organized services with high use of technology include financial intermediation,
post and telecommunications, other business activities and supporting/auxiliary
transport activities, and travel agencies.

Education and health services also record a high usage of computers, but show lower
internet usage.
Services establishments in richer states adopt technology somewhat more than those in
poor ones, while those in urban areas have greater usage ratios than their rural
counterparts.

Service sector Vs manufacturing sector:

Relative to manufacturing, economic activity in services tends to be spread around

larger distance bands.

Distance from the top 3 cities versus top 7 cities has a different relationship for the two
sectors. Activity for organized manufacturing tends to decline faster and in a more
regular pattern from the three largest cities compared to services, where activity is
relatively more spread out.

Both sectors have moved into closer proximity to the big three cities. The pattern,
however, is especially prominent for services compared to manufacturing. Thus, even
though improvements in transport infrastructure are helping activate intermediate sized
cities, the importance of the largest cities is undeniable and important.
Advantages of services sector:

Services offer several advantages over manufacturing.

 They create many more jobs, and contribute more to output and productivity
growth.
 They also employ more women, and are less likely to despoil the environment.
 Services are also less vulnerable to global trade protectionism.
 Although services are more urbanized than manufacturing, they are not tied to
big cities. This raises the possibility that services could be the new growth driver
that can promote inclusive spatial development, and create more jobs in
secondary cities.
 Services have the potential to better spread spatial gains, if complemented by
policies such as investment in digital literacy and better regulation.
 Recent information and communication technology innovations have upturned
services.
 Services account for many more of the larger establishments in India compared
to manufacturing.
 While large manufacturing firms are moving away from the urban core to the
rural periphery, the same trend is not evident for organized services.

SERVICE SECTOR – IS IT ENGINE FOR GROWTH

Service sectors act as an engine for inclusive growth in India due to the following
reasons:

 The service sector will be able to contribute to inclusive growth by enhancing

investment, creating employment and human capital, and developing
infrastructure.
 It is important for a developing country like India with a large, young population
to generate quality employment and to move up the value chain.
 The service sector is the engine of growth of the Indian economy.
 The services sector in India is one of the major contributors to both national
income and employment.
  India needs private investments in key infrastructure services such as transport,
energy, and telecommunications. It can attract FDI and private investment only
with a stable, transparent, non-discriminatory, competitive policy environment.
 This sector will enhance the productivity and efficiency and will lead to inclusive
growth.

India’s dominant services sector is not called the economic engine without reason. The
sector, which accounts for about 55.2 percent of gross value added, is likely to lead
growth in gross fixed capital formation — a measure of investment spending — that had
remained subdued in the last couple of years, according to an analysis by Care Ratings
Ltd.

The Reserve Bank of India and investment banks such as Goldman Sachs Group Inc. are
betting on a revival in private investments in Asia’s third-largest economy to boost
growth from an expected four-year low. But gross fixed capital formation has fallen to
28.5 percent of gross domestic product in the year to March 2018 from 34.3 percent in
the 2012 financial year, according to Care Ratings.

“Quite clearly the level has to be increased,” Care Ratings said, pegging the desired rate
at above 30 percent to bring about accelerated growth in the economy. “Higher
investment in capital is more likely to be scattered and concentrated in the relatively
higher growth sectors and will not be all-encompassing.”

The study showed healthcare, information technology, banking, telecom, retail and
ship-building had the highest growth rates of investments between the financial years
2012 and 2017. But their share was dwarfed by the total amount of capital poured into
telecom, power, oil, steel and banks, which together attracted 72 percent of the
investments.

Care Ratings said a combination of high inflation, a slowdown in incomes and banks
wary of lending because of rising soured loans have hit investments. High real interest
rates are also a reason investments are being held back. That’s affected capacity
utilization in the manufacturing sector, which was in the region of 70-72 percent — well
below the 78-80 percent threshold considered good for the economy, according to Care.

“The regime of low interest rates may have ended as they are poised to increase or at
best remain unchanged this year,” Care said, adding that “growth in demand and better
capacity utilization would be the clue to higher investment in manufacturing.”
India’s robust economic growth to continue in 2019

The country is expected to witness strong economic growth in 2019, after it has
emerged as the fastest growing major world economy this year despite growing global
vulnerabilities, industry body CII said Sunday. The positive outlook is buttressed by
strong drivers emanating from services sector and better demand conditions arising out
of poll spend, with the general elections slated next year, according to the chamber.
“Better demand conditions, settled GST implementation, capacity expansion from
growing investments in infrastructure, continuing positive effects of reform policies and
improved credit offtake especially in the services sector at 24 per cent will sustain the
robust GDP growth in the range of 7.5 per cent in 2019,” CII Director General Chandrajit
Banerjee said.

The industry body observed that despite 2018 being filled with external vulnerabilities
arising out of rising oil prices, trade wars between major global trading partners and US
monetary tightening, India outshined as the world’s fastest growing major economy. It
has identified seven key drivers for growth that need to be fostered and suggested
policy actions for robust GDP growth to continue in 2019. Among key growth drivers, CII
hopes the GST Council will consider extending the tax to currently exempted sectors
such as fuel, real estate, electricity and alcohol.

The chamber outlined that credit availability has been a challenge, particularly for the
micro, small and medium enterprises, as credit flow to industry grew by a mere 2.3 per
cent in first half of the current financial year. “CII submits that the RBI should introduce
measures such as revisiting lending restrictions of PCA (Prompt Corrective Action) banks,
opening of a limited special liquidity window to meet emergencies of financial
institutions, including Mutual Funds besides others to improve liquidity in the system,”
it said. Besides, the process of insolvency resolution has taken shape, the chamber feels
the government should consider setting up additional benches of the National Company
Law Tribunal to strengthen the judicial infrastructure for easier and faster exit of
distressed businesses.

The chamber believes the government will continue to place high priority on simplifying
business procedures in 2019, especially in terms of working with states for grassroots
improvements. “We look forward to digitization of land records, online single window
systems in states, and enforcing contracts for even more improvements in ease of doing
business,” said Banerjee.

Services sector is the biggest one in India and contributes more than half of Gross Value
Added (GVA). As of 2018, 34.49 per cent of India’s employed population was working in
the services sector. India ranked as the eighth largest exporter of commercial services
globally in 2017. The sector is a major contributor to the country’s FDI Inflows.

Nikkei India Services Purchasing Managers' Index (PMI) reached 53.2 in December 2018.

Services exports comprise a major part of the total exports of India. Net Services exports
from India stood at US$ 38.95 billion in H1 2018-19 (P).

India is the export hub for software services. It has a 55 per cent share in the US$ 185-
190 billion global sourcing market in 2017.

Sub-sectors that are performing well are:

 Aviation – India’s air passenger traffic doubled to 117.18 million in 2017 from
59.87 million in 2011. It stood at 226.80 million during April-November 2018.
 Tourism – Foreign Exchange Earnings from tourism rose 20.8 per cent year-on-
year to US$ 27.7 billion in 2017.
 Information technology-business process management (IT-BPM) – Software
exports are expected to grow 7-8 per cent and the domestic market is expected
to expand by 10-11 per cent*.

The Government introduced ‘Services Exports from India Scheme’ (SIES) aimed at
promoting export of services from India by providing duty scrip credit for eligible
exports. Under this scheme, a reward of 3 to 5 per cent of net foreign exchange earned
is given for Mode 1 and Mode 2 services. In the mid-term review of Foreign Trade Policy
2015-20, SEIS incentives to notified services were increased by 2 per cent. Also,
Government of India has identified 12 sectors under the Champion Services Sectors
Initiative which is aimed at formulating cross-cutting action plans to promote their
growth.
Factors that makes the Service Sector an Engine of Growth in the Indian
Economy

Indians are undergoing a distinct change. They eat out more than ever; get their clothes
dry-cleaned use mechanics to service their cars; taken their dogs to veterinarians visit
beauty salons. Working couples drop children at day care centers and hire maids to take
care of homes.

People use services to gardeners to tend garden; use plumbers to keep fix sanitary
problems; use electricians to keep appliances working; teachers for education, doctors
for keeping health, police for safety and protection, lawyers to settle disputes,
accountants to keep records, stockbrokers to execute stock transactions, insurance
agents for risk cover, banks for saving and investments, cable and theatre for
entertainment, public transportation for movement, social workers for good deeds, and
airlines for transportation.

The list seems inexhaustible. Services play a dominant role in our lives. Services sector is
the fastest growing sector of Indian economy. It cloaked a growth rate of 8 per cent in
the 1990s. One in two Indians draws his or her living from services. This is a highly
diversified sector, including services like house maids to neurosurgeons.

Three related events of the 1990s gave boost to services. Explosion in information
technology fueled sectors like telecom, software, finance and banking. The globalization
of business and consumer tastes powered boom in accountancy, low and entertainment
and retailing. A painful restructuring of manufacturing and stagnant agriculture further
provided fuel to Indian economy to jump from agriculture to services. Service sector will
positively outstrip its performance in next ten year.

It was just $50 million industry in 1989. This sector grew to good $12 billion around the
turn of the century. The Economic Survey 2010 observed that service sector actually has
been India’s work horse for over a decade. Several of its constituent sub sectors like
trade, hotels, transport, communication, insurance, financing, real estate,
entertainment community services and business services sustained impressive growth
often outstripping overall economy growth.

The India Brand Equity Foundation lists the lead indicators to suggest that the pace of
expansion of service sector is likely to continue. Consider the following:

 Foreign tourist arrivals (FTAs) during January to September 2010 were 3.84
million, an increase of 10 per cent, over 3.49 million over the corresponding
period in 2009, as per the Ministry of Tourism data.

 According to the Telecom Regulatory Authority of India (TRAI), the number of

telephone subscribers in the country reached 706.37 million as on August 31,
2010 an increase of 2.61 per cent from 688.38 million in July 2010. With this the
overall tele-density (telephones per 100 people), touched 59.63.

 According to the Indian Ports Association data major ports in India handled
271.91 million tons (MT) traffic during April- September 2010-11, as compared to
267.98 MT handled during same period last year, registering a growth of 1.23 per
cent.
 According to the Central Statistical Organization, the key indicators of railways,
namely, the net ton kilometers and passenger kilometers have shown growth
rates of 4.7 per cent and 5.6 per cent, respectively in the first quarter of 2010-11.

This phenomenon can be called conquest of brain power over horsepower. Services
sector is India’s new economy. Most economies began as agriculture and later the rich
ones shifted from ‘farm to factories’ in the beginning of twentieth century. India
seemed to have skipped over the industrial stage. It probably happened by default. The
stunted growth of Industries is attributable to the 40 years of restrictive license raj and
closed economy, anti-growth small sector reservation and labor laws.
But these did not exist in services, providing fertile group for services growth. Abundant
labour and knowledge contributed to most hi-tech industries. The scarcity of capital
further contributed to the sector as services required little capital. Bureaucracy has
been less stifling for services.

The service sector is likely to account for as high as 60 per cent of the economy in next
year’s. But all the promises that this sector holds could vanish if investments in the
human resources suffer. The investment in the human resources is the key to sustaining
this engine of growth.

ECONOMIC SURVEY 2018

The Economic Survey 2017-18, was tabled in the Parliament on January 29, 2018, by Mr.
Arun Jaitley, Union Minister for Finance, Government of India. The Survey forecasts a
growth rate of 7 to 7.5 per cent for FY19, as compared to the expected growth rate of
6.75 per cent in FY18. Focus on private investments and exports, two truly sustainable
engines of economic growth, will be crucial in improving the climate for rapid economic
growth.

 Fiscal Deficit: Central Government is confident of achieving fiscal deficit of 3.2 per
cent of GDP for 2017-18.

The fiscal deficit during April-November 2017 has reached 112 per cent of budgeted
expenditure as compared to 85.8 per cent during the corresponding period last year.

Revenue and fiscal deficits of states as a percentage of corresponding budget estimates

is lower in the current year as compared to the previous year.

 GDP Growth: GDP growth expected to be between 6.5 and 6.75 per cent in 2017-18.

Real GDP growth expected at 6.5 per cent in 2017-18

GVA growth at basic prices is expected to be 6.1 per cent in 2017-18

 Inflation and monetary policy:

Average retail inflation, measured by Consumer Price Index (CPI), in 2017-18 (April –
December) seen at 3.3 per cent.

Average Wholesale Price Index (WPI) inflation, in 2017-18 (April – December) seen at 2.9
per cent from 1.7 per cent in 2016-17.

The Reserve Bank of India (RBI) has cut the repo rate by 25 basis points to 6.0 per cent in
August 2017.

 External Sector:

The current account deficit has declined to reach about 1.8 per cent of GDP in the first
half of FY2018.

During April-December 2017, trade deficit increased by 46.4 per cent over
corresponding period of previous year.

During April-December 2017, exports grew 12.1 per cent to US$ 223.5 billion, while
imports increased by 21.8 per cent to US$ 338.4 billion.

Private transfer receipts, most of which is composed of remittances from Indians

working abroad, increased by 10 per cent to US$ 33.5 billion in first half of 2017-18.

PERFORMACES IN THE KEY SECTOR:

 Services sector:

The services sector is projected to grow at 8.3 per cent in 2017-18, as against 7.7 per
cent in 2016-17.

As per World Trade Organisation (WTO) data, India’s share in the exports of commercial
services in the world increased to 3.4 per cent in 2016 from 3.3 per cent in 2015.

In terms of growth in tourism sector, between January-December 2017, Foreign Tourist

Arrivals (FTAs) were 10.2 million with a growth of 15.6 per cent and foreign exchange
earnings (FEE) were at US$ 27.7 billion with a growth of 20.8 per cent.
The development economics suggests that during the stages of development share of
service sector in the GDP increases with the development while that of primary sector
decreases. With services leading the world economic growth, they are being regarded as
the engine of growth as well as the necessary concomitant for economic growth.

The services sector constitutes a large part of the Indian economy both in terms of
employment potential and its contribution to national income. The Sector covers a wide
range of activities from the most sophisticated in the field of Information and
Communication Technology to simple services pursued by the informal sector workers,
for example, vegetable sellers, hawkers, rickshaw pullers, etc. More than half of more
than Rs.45 lakh crore GDP is attributed to the service sector. The service sector also
known as tertiary sector is growing at 10 percent per annum, employing more than
quarter of the work force. It accounts for a high share in foreign direct investment (FDI)
inflows and over one-third of total exports.

The services included in the service sectors trade, tourism, communication, transport,
Information Technology (IT) and Information Technology enabled services (ITeS),
community and personal services, financial services, entertainment industry etc. The
very nature of these services facilitates in the growth of other sectors viz industry and
agriculture. Among the services, trade is an important segment in India’s GDP. The GDP
from trade (inclusive of wholesale and retail in the organized and unorganized sectors)
increased at 9.1 percent during 2009-10. With the growth in income and growing
consuming population, the retail business also got a boost. However, share of trade in
overall GDP remained fairly stable at around 15 per cent in the last four years because
of higher growth witnessed by other sectors.

Tourism is one of the major engines of economic growth in most parts of the world
including India. According to the UN World Tourism Organization, tourism provides 6
per cent to 7 per cent of the world’s total jobs directly and millions more indirectly in
this sector. Tourism also plays an important role in the country’s foreign exchange
earnings, as its share in India’s export of services accounted for 13 per cent of the total
export of services in 2009-10. During the six year period 2004-09, growth in foreign
tourist arrivals and foreign exchange earnings from tourism was 8.1 per cent, and 14.5
per cent respectively. Medical tourism, rural tourism are some new streams fueling the
growth of tourism.
The hotels and restaurants sector is an important sub-component of the tourism sector.
Availability of good quality and affordable hotel rooms plays an important role in
boosting the growth of tourism in the country. Presently there are 1593 classified hotels
with a capacity of 95,087 rooms in the country. The hotels sector comprises various
forms of accommodation, namely star category hotels, heritage category hotels,
timeshare resorts, apartment hotels, guest houses, and bed and breakfast
establishments. Hotels and restaurants registered the growth of 8.5 percent during
2004-09.

The telecom sector has grown from a level of 22.8 million telephone subscribers in 1999
to 54.6 million in 2003, and further to 764.77 million at the end of November 2010.
Wireless telephone connections have contributed to this growth as the number of
wireless connections rose from 3.57 million in March 2001 to 729.58 million by the end
of November 2010. Tele-density, which was 2.32 per cent, increased to 64.34 per cent in
November 2010. However, there is a wide gap between rural tele-density (30.18 per
cent in November 2010) and urban tele-density (143.95 per cent in November 2010).
This shows that the market still has large untapped potential. Broadband is often called
‘high speed’ Internet, because it usually has a high rate of data transmission. Broadband
subscribers grew from 0.18 million in 2005 to 10.71 million as at the end of November
2010.

At IT and ITeS services India has gained a brand identity as a knowledge economy. The
IT-ITeS industry has four major components: IT services, business process outsourcing
(BPO), engineering services and R&D, and software products. The growth in the services
sector in India has been led by the IT-ITeS sector which has become a growth engine for
the economy, contributing substantially to increases in the GDP, employment, and
exports. This sector has improved its contribution to India’s GDP from 4.1 per cent in
2004-05 to 6.1 per cent in 2009-10 and an estimated 6.4 per cent in 2010-11. The
industry has also helped expand tertiary education significantly. The industry saw robust
growth by an estimated 19.5 percent in 2010-11 compared to the moderate growth of
6.2 per cent in 2009-10. Between 2004-09, IT and ITeS exports grew by whopping 22.2
percent.
Apart from the above illustrated services, there are other services also with huge
prospects of growth like legal services, consultancies, real estate services, community
and personal services, social services, Research and Development, audit and account
services etc. Given the diverse activities in services, supporting its growth requires
careful and differentiated strategies.

Though service sector is considered to be employment intensive sector but in India, it is

still waiting for the migration of workforce from primary sector, which harbors more
than 55 percent of the workforce, to the tertiary sector. The major reason quoted for
this anomaly is the lack of skilled labour in the country. The only recourse available to
rectify this anomaly is to introduce skill enhancement in the workforce through training.
If service sector succeeds in providing the employment as it provides GDP growth,
inequalities in the country can be reduced to considerable extent.

Undoubtedly, India has experienced a robust service led growth in the post-
liberalization era, but sustaining such growth is equally vital and to achieve sustainable
growth, India has to considerably improve its infrastructure and human capital. Where
infrastructure development is vital for the growth of services like transport,
communication, and tourism etc, supply of skilled workforce is essential for the services
like IT and ITeS, communication, BPO, accounting services, legal services, financial
services etc. India already created a niche in the word for its services and now it must
endeavor to use the service sector as a tool to achieve goals like poverty eradication,
employment generation, income and regional equality etc.

Conclusion

India is one of the fastest growing economies in the world after China. Indian economy
was least affected by the global slowdown due to strong fundamentals, highly resilient
domestic economy, high saving and investment rates and a dynamic and strong service
sector. Like other economies in the world, the service sector is the engine of growth of
the Indian economy. The services sector in India is one of the major contributors to both
national income and employment. When the New Economic Policy was introduced in
1991, Indian economy underwent a structural transformation from the ‘Agriculture-led
growth’ to ‘Services-led growth’. India’s high growth rate in the post-reform period was
mostly achieved and maintained by the spectacular and consistently robust growth of
the services sector. Services sector in India is the most dynamic sector, growing at an
average annual rate of about 10 per cent, and exhibiting enough resilience to nullify the
negative repercussions of the global financial crisis. India is marching towards a service-
led export growth rather than manufacturing-led export growth. There are various
problems and challenges that are faced by the service sector.

REFERENCES

India. Central Statistical Organisation. (Series1950 onwards) Economic survey. New

Dehli; Government of India. Available on: indiabudgetnic.in/survey.asp

http://www.journalijar.com/article/11557/services-sector:-an-engine-of-inclusive-
growth-in-india/

https://www.indiainfoline.com/article/news-union-budget-economic-survey/economic-
survey-2017-18-services-sector-contributed-almost-72-5-of-gva-growth-in-2017-18-
118012900155_1.html

https://www.ibef.org/economy/economic-survey-2017-18

http://mofapp.nic.in:8080/economicsurvey/