The service industry forms the backbone of social and economic development of a country. It has emerged as the largest and fastest-growing sectors in the world economy. The service sector has shown a growth rate higher than that of agriculture and manufacturing sectors. This sector covers a wide range of activities, such as trading, transportation, communication, financial, real estate and business services. In India, the services sector, as a whole, contributed about 65 per cent of the country’s gross domestic product (GDP), 35 per cent of employment, a quarter of the total trade, and over half of the foreign investment inflows.
The most important services in the Indian economy have been in the health and education sectors. These are one of the largest and most challenging sectors and hold a key to the country’s overall progress. A strong and well-defined health care sector helps to build a healthy and productive workforce.
The era of economic liberalisation has ushered in a rapid change in the service industry. As a result, over the years, India has been witnessing a transition from agriculture-based economy to a knowledge based economy. The knowledge economy creates, disseminates, and uses knowledge to enhance its growth and development. One of the major functional pillars of this economy is Information Technology (IT) and IT-enabled services (ITeS) industry. IT continues to be a dominating sector in the overall growth of the Indian industry.
Another major and upcoming sector is retail. It has been one of the fastest growing sectors both in terms of turnover and employment. Many national and global players have been investing in the retail segment and making all out efforts to further expand the sector.
The service sector holds immense potential to accelerate the growth of the economy and promote general well-being of the people. They offer innumerable business opportunities to the investors. They have the capacity to generate substantial employment opportunities in the economy as well as increase its per capita income. Without them the Indian economy would not have acquired a strong and dominating place on the world platform.