The service sector accounts for over half of India's GDP and provides employment for around 23% of the workforce. Key service industries include trade, hotels and restaurants, banking and insurance, and business services. The growth of the service sector has been fueled by foreign interest in outsourcing to India due to its large pool of skilled, low-cost workers. The tourism and hospitality industry is also growing rapidly and is expected to contribute significantly to GDP and employment. Medical tourism in particular is seeing high growth and earnings from tourism have increased substantially in recent years.
The service sector accounts for over half of India's GDP and provides employment for around 23% of the workforce. Key service industries include trade, hotels and restaurants, banking and insurance, and business services. The growth of the service sector has been fueled by foreign interest in outsourcing to India due to its large pool of skilled, low-cost workers. The tourism and hospitality industry is also growing rapidly and is expected to contribute significantly to GDP and employment. Medical tourism in particular is seeing high growth and earnings from tourism have increased substantially in recent years.
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The service sector accounts for over half of India's GDP and provides employment for around 23% of the workforce. Key service industries include trade, hotels and restaurants, banking and insurance, and business services. The growth of the service sector has been fueled by foreign interest in outsourcing to India due to its large pool of skilled, low-cost workers. The tourism and hospitality industry is also growing rapidly and is expected to contribute significantly to GDP and employment. Medical tourism in particular is seeing high growth and earnings from tourism have increased substantially in recent years.
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Prof. Rupal Choudhary • Akhil Saigal • Fatema Murabbi • Priyanka Jaisinghani • Radhika Mantri • Rohan Saini Introduction • Service Sector in India today accounts for more than half of India's GDP. • In the financial year 2008-2009, the share of services, industry, and agriculture in India's GDP is 53.7 per cent, 29.1 per cent, and 17.2 per cent respectively. • India ranks fifteenth in the services output and it provides employment to around 23% of the total workforce in the country. Various service sectors in India • Trade • Hotels and Restaurants • Railways , other transport & storage • Communication (Post, Telecom) • Banking & Insurance • Dwellings, Real Estate • Business Services • Public Administration; Defence • Personal Services • Community Services The Reasons for the growth of the Services Sector contribution to the India GDP • Many foreign consumers have shown interest in the country's service exports. • Large pool of highly skilled, low cost, and educated workers in the country. • The foreign companies seeing this have started outsourcing their work to India. • This has given a major boost to the Services Sector in India, which in its turn has made the sector contribute more to the India GDP. Tourism & Hospitality Introduction • India’s travel & tourism industry is expected to generate approx. US$ 100bn in ’09, growing at 7.3% & rising to US$275.5 by 2018. • Forex earnings from tourism in India rose from US$ 3 bn in ‘02 to 11.96 bn in ‘08. • Tourism is expected to contribute around 6.1% to national GDP & provides employment to over 41 mn people. Inbound & outbound tourists • Inbound tourists arrival has increased from 0.46% in’04 to 0.67% in ’08. • Forex earnings grew at a much faster rate at 28.9% in’07 against 20% in’08. • India accounts for 0.5%(4.5mn) of global tourists, whereas outbound tourists are over 8.5mn. • Outbound tourists market has been growing at an annual growth rate of 25%. Medical Tourism • India is aggressively promoting the concept of medical tourism & capitalizing on its low cost & highly trained doctors. • The country also has some of the best hospitals that are highly equipped & provide services at a fraction of costs. • Estimated earnings of US$1.86bn by 2012 at a growth rate of 8.8%. • Current earnings being US $821.40mn. HOSPITALITY • Country’s hospitality sector has witnessed an increase in the occupancy ratios & avg room rates. • With the occupancy ratio of around 75-80% the avg increase in room rates hover around 22-25%. • Estimated 10mn foreign visitors by 2010 thereby creating a demand for 100000 rooms approx. • Estimated around 40 international hotel brands by 2011. International Recognition REAL ESTATE • The Indian economy is steadily moving forward on its path to prosperity, with economic development being the focal point of the progress. • Today India is seen as a prime destination for investment by overseas investors across the board. • India’s favorable demographic and economic scenario makes it an attractive destination for the real estate investors. • Real estate sector has been deregulated and liberalized and is growing at a rate of 30% and has emerged as one of the most appealing investment areas for domestic as well as foreign investors. • It is the second largest employing sector in India and is linked to about 250 ancillary industries like cement, brick and steel. • A unit increase in this sector has a multiplier effect and the capacity to generate income as high as five times. KEY GROWTH DRIVERS • Growth of India’s middle class, creating demand for housing. • India has second largest population in world • Increasing FDI in this sector • Easy availability of finance • Expansion of organized retail sector • Availability of home loans at competitive rates • Rising income TOP PLAYERS • UNITECH • HIRANANDANI • DLF • ANSAL GROUP • RAHEJAS GOVERNMENT INITIATIVES • 100% FDI allowed in this sector • Minimum capital investment for wholly owned subsidiaries and JVS stand at us$ 10 million and us$ 25 million respectively. • Full repatriation of original investment after 3 years. • Government has allowed FDI in retailing with 51% participation. GOING GLOBAL • Embassy Group has linked a deal with the Serbian government to construct a us$ 600 million IT park in Serbia. • Parsvanath Developers has tied up with the Al-Hasan Group in Oman. • The Hiranandani’s are constructing 5000 5star hotel rooms, which will come up between Abu Dhani and Dubai. • Kolkata’s South City Project is working on 2 projects in Dubai. ALL-ROUND DEVELOPMENT • There will be demand for over 24.3 million new dwellings in urban India alone by 2015. • An estimated us$ 25 billion investment will be required over the next 5 years in urban housing. • The real estate sector has grown at an increasing rate of about 30% and is expected to continue growing at 25% for the next 3 to 4 years. • Year 2007 saw the sector clocking $48 billion, which is expected to reach $140 billion by 2012- projecting a growth of 21% per annum. • The sector is currently on a high- mainly because the high economic growth, shortage of residential spaces, growth in Ites and retail. • The focus though would now shift more towards smaller cities, since the metros are getting saturated.