SECT OR

SERVICE
Presented By :
Abhishek Khandelwal (12PT1-03) Ajay Giridharan (12PT1-06) Archit Bhardwaj (12PT1-18) Ashim Howlader (12PT1-19) Charanjeet Singh (12PT1-21) Manik Jhamb (12PT1-40)

INDIAN

ROLE OF THE

Services Classification

Service Sector

Organized

Un-organized

Public

Private/ Corporate

Household

Services Classification (As per WTO)

Business Services COMMUNICATION SERVICES CONSTRUCTION AND RELATED ENGINEERING SERVICES DISTRIBUTION SERVICES EDUCATIONAL SERVICES ENVIRONMENTAL SERVICES FINANCIAL SERVICES HEALTH-RELATED AND SOCIAL SERVICES RECREATIONAL, CULTURAL AND SPORTING SERVICES TRANSPORT SERVICES
A. Professional Services B. Computer and Related Services C. Research and Development Services D. Real Estate Services E. Rental/Leasing Services Without Operators F. Other Business Services 2. COMMUNICATION SERVICES A. Postal Services B. Courier Services C. Telecommunication Services D. Audiovisual Services E. Others 3. CONSTRUCTION AND RELATED ENGINEERING SERVICES 4. DISTRIBUTION SERVICES 5. EDUCATIONAL SERVICES 6. ENVIRONMENTAL SERVICES FINANCIAL SERVICES A. All Insurance and Insurance-Related Services B. Banking and other Financial Services (excluding insurance) C. Other HEALTH-RELATED AND SOCIAL SERVICES TOURISM AND TRAVEL-RELATED SERVICES RECREATIONAL, CULTURAL AND SPORTING SERVICES TRANSPORT SERVICES A. Maritime Transport services B. Internal waterways transport C. Air Transport Services D. Space Transport E. Rail Transport Services F. Road Transport Services G. Pipeline Transport H. Services Auxiliary to all Modes of Transport OTHER SERVICES NOT INCLUDED ELSEWHERE

Source: http://indiabudget.nic.in

Services in India
1. Trade, hotels and restaurants (THR) 1.1 Trade 1.2 Hotels and restaurants 2. Transport, storage and communication 2.1 Railways 2.2 Transport by other means 2.3 Storage 2.4 Communication 3. Financing, Insurance, Real Estate and Business Services 3.1 Banking and Insurance 3.2 Real Estate, Ownership of Dwellings and Business Services 4. Community, Social and Personal services 4.1 Public Administration and defense (PA & D) 4.2 Other services

Source: Asian Productivity Organization (APO)Project No. 08-RP-38-GE-STM-B:

Services & GDP

Services sector has outgrown both the industry and agriculture sectors Service sector growth rate (at constant prices) has almost always been above overall GDP growth rate Pushes up the growth of the economy with a great amount of stability

Source: CSO

The share of services in Indias GDP at factor cost (at current prices)
33.5% (1950s)to 55.1% (2010-11) 56.3% (2011-12) as per Advance Estimates (AE). 63.3% (2010-11) 64.4% (2011-12)

Including construction

Service growth rate:

10.5 % (2009-2010) 09.3 % (2010-2011) 09.4 % (2011-12)-AE
Source: http://indiabudget.nic.in

Services & GDP - Subsector

Top three contributors :

Trade, hotels, and restaurants (16.9 %) Financing, insurance, real estate, and business services (19.4 %) Community, social, and personal services (14.3 %)

Source: http://indiabudget.nic.in

Services & Employment

Primary (Agriculture) Secondary (Industry) Tertiary (Service, including construction)

Share of services has been increasing over the years Sharp fall in the share of the primary sector in employment Consequent rise in share of employment of the other two sectors was almost equally divided

As per NSSO, for 1000 people employed during (2009-10) the distribution is as follows

Rural Urban
75

675

80 242

241 681

Employment growth rate is highest in finance, insurance, and business services, Followed by trade, hotels and restaurants and transport etc. The community social and personal services occupy the last rank in growth rates of employment.
Source: http://indiabudget.nic.in

1000

Services & FDI

Cumulative share of FDI in :
Combined financial and non-financial services, computer hardware and software, telecommunications, and housing and real estate: 41.9 % Construction sector: 6.50 % Hotels and tourism : 2.02 % Information and broadcasting : 1.60 % Consultancy services: 1.21 %

Total FDI share: around 58%

Top Source countries of FDI in service :

Mauritius (39 %) Singapore (15.4 %) UK (8.6%) USA (7.1%) Japan (4.5%)

Source: http://indiabudget.nic.in

Services & FDI

Mauritius
Telecommunicati ons Services sector that includes both nonfinancial and financial

Singapore

UK

USA
Information technology Telecommunications which includes services of radio paging, basic telephone, and cellular mobile Service sector which includes non- financial and financial services Telecommunications which includes services of basic telephone, radio paging, and cellular mobile Service sector which includes non- financial and financial services Electrical equipment which includes electronics and computer software

Telecommunication s Transportation industries Services Information technology

Source http://business.mapsofindia.com/fdi-india/investing-country/

Real Estate Services

Estimates show that for every rupee that is invested in housing and construction, 0.78 gets added to GDP Housing ranks fourth in terms of the multiplier effect on the economy and third amongst 14 major industries in terms of total linkage effect The real estate industry has significant linkages (both direct and indirect) with nearly 300 sectors like cement, steel, paints, and building hardware which not only contribute to capital formation and generation of employment and income opportunities, but also catalyze and stimulate economic growth

IT & ITeS
The IT-ITeS industry has four major sub-components:
IT services, business process outsourcing (BPO), engineering services and research and development (R&D), and software products.

Indias IT and BPO sector (excluding hardware) revenues were US$ 87.6 billion in 2011-12, generating direct employment for nearly 2.8 million persons and indirect employment of around 8.9 million.
As a proportion of national GDP, IT and ITeS sector revenues have grown from 1.2 per cent in 1997-8 to an estimated 7.5 per cent in 2011-12.

Overall Growth of the IT-ITES Sector

R&D Services
Gross expenditure on R&D (GERD) by India for 2012 was projected to be US$ 41 billion in purchasing power parity terms, which works out to 0.8 per cent of GDP.

Legal Services
Legal Practitioners (mostly unorganized) 6Lac (next only to USA) 913 Colleges, 14 National Law Schools Legal system in India, USA & UK are rooted in British Common Law

Offshoring legal work to India saves about 80 per cent of the cost of MNCs
For further growth
Legal & Judicial reforms Advanced Legal Studies & Research Centers needed Quality Law Teachers needed Skills, attitudes and ethics need improvement National Litigation Policy to reduce avg pendency time from 15 yrs to 3 yrs and delays in courts

Construction Services
Share of GDP 8.2%, Growth in 2010-11 -8%, 2011-12 4.8% Creates investment opportunities and increases production capacity across various related sectors

Employment 33million people (direct + indirect)

Accounts for more than half the investment required for setting up critical infrastructure like
Power Projects, Ports, Railways, Roads, Bridges

FDI up to 100% allowed in townships, housing, built-up infrastructure, and construction of development projects (which include housing, commercial premises, educational institutions, and recreational facilities) Govt plans to enhance infrastructure investment to 1Trillion $ in Twelfth Plan Sector given industry status in year 2000. Boost to PPP projects BOT, BOOT, BOLT Tax Free Bonds, Infrastructure Debt Funds

Issues
Rising Cement, Steel prices Rising Interest Rates Delays in National Projects - Freight Corridors, MRTS, Airports in Tier II, III cities, urban real estate development

SWOT analysis
Strength Highest contributor towards GDP (57 %) Highest employment generator(29 %) Strong telecom & IT infra 4th largest railway network Large pool of skilled mrg & tech expertise Long coastline Brand identity as knowledge economy Opportunities India rich in renewable energy resource 4th largest economy, hence preferred FDI destination Large size of middle class population Mutual development of education & service sector Govt policy to support growth Engg. Consultancy is experiencing boom Weakness Shifting population from primary & secondary Mechanization of agriculture not possible Opportunity for uneducated /less educated are very low Service sector growth w/o primary & secondary not sustainable Threats Growing regional variation (poverty, inra, socio-economic) development Mechanization not possible leading to increasing cost Present standard of service is not sufficient and sustainable

Looking Forward
Problems Ahead Sustainability (social & physical infra, agriculture, industrial sector) Rising labor cost Demand of quality staff High attrition rate Delay by govt. in implementing conducive policies Governance issues Challenges Retaining competitiveness in IT/ITES and telecom Large scale development in traditional subsectors like tourism, shipping Entry into niche sectors like : health tourism, financial, accountancy, education. Developing a common policy for the development of all sectors (balance between primary, secondary & service) Prospects IT/ITES : one of the drivers of service sector Increasing disposable income Increasing urbanization Growth in middle class Development of financial sector Development of tourism

Policy measures Liberalization of IT, BPO, ecommerce., infrastructure National Telecom policy Broad band policy

Thank
You

Presented By :
Abhishek Khandelwal (12PT1-03) Ajay Giridharan (12PT1-06) Archit Bhardwaj (12PT1-18) Ashim Howlader (12PT1-19) Charanjeet Singh (12PT1-21) Manik Jhamb (12PT1-40)