Role of Service in Economic Growth

Trinity Journal of Management, IT & Media (TJMITM)
Year: 2015 (Jan-Dec), Volume: (6), Issue. (1)
First page: (32) Last page: (35)
Online ISSN: A/F
Print ISSN: 2320-6470
doi: 

Role of Service in Economic Growth
Sarita Chawla

1Assistant Professor; Trinity Institute of Professional Studies, Dwarka, New Delhi
Corresponding author email id:

Received:
18 -04-2015

Accepted:
12-06-2015

Online Published:
11-07-2015

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ABSTRACT

In India the services sector with an around 57 per cent contribution to the gross domestic product (GDP) has made rapid strides  in the last few years and emerged as the largest and fastest-grow ing sector of the economy. Besides being the dominant sector in  India’s GDP, it has also contributed substantially to foreign in vestment flows, exports, and employment. India’s services sec tor covers a wide variety of activities that have different features  and dimensions. The service sector comprises commercial banks,  insurance companies, non-banking financial companies, co-oper atives, pension funds, mutual funds and other smaller financial  entities. The financial sector in India is predominantly a banking  sector with commercial banks accounting for more than 60 per  cent of the total assets held by the financial system. India has the second fastest growing services sector with its com pound annual growth rate at nine per cent, just below China’s 10.9  per cent, during the last 11-year period from 2001 to 2012, the  Economic Survey for 2013-14 said. Russia at 5.4 per cent is a  distant third. Among the world’s top 15 countries in terms of GDP,  India ranked 10th in terms of overall GDP and 12th in terms of  services GDP in 2012, it said, adding that services share in world  GDP was 65.9 per cent but its share in employment was only 44  per cent in 2012. As per the survey, in India, the growth of services-sector GDP  has been higher than that of overall GDP between the periods  FY2001- FY2014. Services constitute a major portion of India’s  GDP with a 57 per cent share in GDP at factor cost (at current  prices) in 2013-14, an increase of 6 percentage points over 2000- 01.Despite deceleration, services GDP growth at 6.8 per cent was  above the 4.7 per cent overall GDP growth in 2013-14. 


KEYWORDS

gross domestic , economy , flows, exports , GDP