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.