THINK LIKE AN ECONOMIST................................PMG..............................................
I N D I A N E C O N O M I C D E V E L O P M E N T C L A S S E S B Y S A M E E R C H A U D H A R Y
banking and insurance,
and trade and distribution services,
While services which were laggards grew at less than 4% such as
These sub-sectoral trends reflect differences inpolicy and regulatory trends across
different servicesand the role of rising incomes and domestic demandin driving
growth in some services.
Communicationservices have been the fastest growing service segment,reflecting the
significant liberalization and deregulationin this sector since the 1990s.The high
growth rate of services has contributedto its rising share in the overall economy.
In 2009, services constituted around 64% of GDP, up from around 48%of GDP in 1990.
Services and Employment
The service sector's contribution to overall employment has risen, though this has not
been commensurate to the growth in services output.
According to the 2001 Indian Census statistics, services sharein employment rose from
20.8% to 25.1% i.e. by less than 5%between 1991 and 2001, while during the same
period,its share in GDP increased by over 10%, implyinglow employment elasticity.
Most of this employment is concentrated in
trade and distribution,
hotel and restaurants, and
Community and personal services segments.
Trade in India's Service Sector
The contribution of,;
services to India's trade and
FDI flows has also been growing
ince the year 2000, facilitating India's integration with the world economy.
India's services exports have grown from a mere $2.9 billion in 1980 to $16.7
billion in 2000 and further to $116.3 billion in 2010.