The Service Sector as India's Road to Economic Growth: An analysis

Abstract

Services are tasks or functions, which are performed by a group or an individual, for which price is decided on the basis of demand if that particular service is available in the related market. Services are sometimes referred to as intangible goods. The consumption is done only at the point of production. Services are typically non-transferable that means they cannot be resold or purchased at a different price. In an economy the service sector plays a vital role in the resource allocation process. The service industry is not only the World's largest industry, but also contributes major portion in GDP. It generates three times more employment as compared to the manufacturing sector. The contribution of the service industry to the GDP of countries like India is over 56.1% in 2015-16.
In addition to this more than 50% of total export of services comes from export of software services in India. On the basis of this rapid growth in service sector growth rate will going to be more than 60 per cent in the next fifteen years in India. After China, India has got the second position as the fastest growing service providing country in the world.
The present study is all about the analysis of the potential and capability of the service sector in the economic growth of the country over the last couple of decades. The main aim of this study is to see the correlation between the growth in the Indian service sector along with growth in the economy in terms of growth in GDP, per capita income and foreign investment.