Service Sector

The service sector in India plays a huge rule in the country’s economy accounting for about half of its GDP.

The service sector is slowly gaining dominance in the country with manufacturing and agricultural sectors taking a back seat.

The growth of the sector is fuelled by new technologies and fast, efficient delivery of services.

The service sector has been on the forefront in driving the economy in India for several years now and this state will remain for at least a decade.

However, the Indian service sector can stand to make some improvements. For one, the foreign direct investment (FDI) into the country is still concentrated in the industrial sector while it is as high as 40% in some countries in the world.

The way to increase FDI is to ensure that India is moving up the value chain. With its vast strengths in human and natural resources, the country has enormous potential and should utilize it to grow the sector.

The country has been emerging as a leader in service delivery in areas like higher or technical education, software, healthcare and biotech. But there is also a need to invest in robust quality systems and delivery mechanisms that are effective in order to be able to compete with the best service industries in the world.

The service industry in India has to tap into the global market if it is going to drive the economy and increase its market share in the world. This is achievable if only the sector will take advantage of skilled labor, low operating costs and emerging technologies.

The Indian software services sector is slowly gaining dominance in the world’s technology market. This is however due to the fact that there was little interference by the Indian government in the Indian software sector.

This has generated a debate stating that privatization of the service sector would accelerate growth and development and attract investments from both local and foreign investors. Service sectors that fall under the Public sector domain have experienced little growth owing to the fact that the budgetary support that they rely on are depleted and there is therefore little room for growth and development.

Other areas of the sector that could do just as well if they ramped up their delivery systems include retailing, logistics, healthcare, tourism and higher education. The sector plays a huge role in creation of employment, and in activation of the industrial sector and infrastructure.