VIBRANCY OF. SERVICE SECTOR

National income computation is broadly divided into three sectors namely 1 Agriculture or primary sector comprising of agriculture, forestry and fisheries 2. Industry or secondary sector which  include mining,   manufacturing, electricity, gas,water supply and construction and 3.Tertiary or services sector with three broad major components of A,Trade, Transport ,storage and communications. B.Finance insurance, real estate, and business services.and C.Community,social and personal services.  Sector wise estimates showed that share of GDP as per 1999-00 series estimated for 1950 -51 showed agriculture contributed 55% of GDP  followed by 30% in industry and 15% by Service sector. In 1980-81Agriculture sector's contribution decreased to 38% and industry increased to 38% and  service sector also witnessed increase to 24%.By 2013-14  agriculture witnessed sharp decline in its share of GDP to just 13.9%.While industrial sector contributed 26.2%  and with a quantum jump the Services sector recorded a whopping 59% share of GDP in 2013-14.

Service sector emerged as the  largest and fastest growing sector in India with great potential in real GDP .Swift rebound witnessed in service sector during 2021-22 was driven by growth in the contact intensive services subsectors.The subsector completely recovered from the pre pandemic level in Q2 has expected to have reached 7.0 % growth during the fiscal year 2022-23. India has significant presence in achieving an estimated Rabi food grain production growth of.2% in the same period.Combined with purchase managers index (PMI) in manufacturing remained strong at 56.4 in March primarily due to favourable domestic demand. It has been observed that vibrant service sector activity has shown greater buoyancy. Accordingly buttresed by favourable demand conditions and pretty new business gains PMI in services remained quite robust at 57.8.The PMI survey is estimated  by S&P Global India composite output index primarily on the basis of responses collected from a panel of 400 business executives across various sectors such as consumers (excluding retail)transport, information, communication,finance, insurance, real estate and business services. Estimates of Services Sector PMI  increased from 58.4 in March 2023 to 61.6 in April 2023.This spectacular performance of the services sector was the highest peak in nearly thirteen years. Among the  main four sub sectors examined  largest increase in output was observed in finance and insurance.Survey reported spurt  in  international demand for Indian services in April as indicated by new export business. Survey also found that  food, fuel, medicine, transportation, and wages were the  major source of inflation with consumer services recording fastest upturn in expansion. According to Sadanand Shukla in 2022-23 India witnessed the first full year of economic activity without Covid19 impact specifically in services. All categories of services are doing extremely well including aviation.Despite some base effect, growth momentum in services sector remains robust and highly sustainable.Obviously service sector will continue to be the most important driver of growth in 2023-24 to achieve around 6.5%-7% growth in GDP .While services make up more than half of our GDP agriculture is expected to contribute 18% and manufacturing 14% respectively. 

 India's service exports mainly comprise of  banking, financial services and Insurance (BFSI) accounting for 41% of the total service exports with US$ 61.4 billion. Gains from high tech/ telecom and other manufacturing services were US$ 26.3 billion and $ 24.3 billion respectively accounting for 17.65% and 16.28% for the period 2021-22. Business services exports surged by 17.1% in first half H1 2021-22 reaching pre pandemic levels. With the liberalisation of the space sector, the Indian National Space Promotion Authorization Centre (IN-SPACe) has received commendable number of proposals from different countries. It has been observed that country's financial sector services  accounted for 29%,computer software and hardware together 27%,Telecommunications 12% Trading 11%,hotels and tourism 5%,information and broadcasting 3%,Education 3%,hospital and diagnostic services 3%,consultancy services 2%,sea transport 2%,retail trade 1% Air transport 1% and agriculture service 1%.

Historically development experience of  different countries indicated that as countries' develop the relative share of agriculture (primary sector) would decline and that of secondary or industrial sector would increase followed by Service sector. But in many  countries though the share of agriculture had declined instead of industrial sector services sector bounced. This trend said to have further increased after the globalisation and liberalisation process. As per 2015 data France ranked first with service sector share of 79.8%, closely followed by USA 79.7%.UK 78.3, Japan 71.4, and Germany 71.1. Countries like Russia recorded 60.1 share India  56.9,China 52.9,a UAE 39.8 and Saudi Arabia 31.Service sector share witnessed drastic changes  as per 2021 data. Macao with 94.18% share of services stood at the top,followed by Lebanon 94.15,,Bermuda 90.5, Hong Kong 89.5,Monaco 80.05,USA with 77.6(9th rank), China 53.31(92 rank)Russia  52.91 (93 rank),.Nepal 52.58(96)'Pakistan 52.11(103) Malaysia 51.55(108),Bangladesh 51.3(121) and India 47.51(128 ).Infact some more changes might have taken place by now. 

In a dynamic world Sectoral  share and composition of GDP, trade and financial flows are bound to change from time to time. But those changes should not adversely affect the sustenance  of both agriculture and industrial development especially in a resource rich country like India .At the same time initiatives taken like Production Linked Incentive in the manufacturing sector,needs to be extended more to the Services sector as per requirement to sub sectors comprising of busines process management, E-commerce, internet prenetration,rise in smartphones,  adoption of digital payments, digital support,cloud services and artificial Intelligence.Measures adopted already included liberalized FDI ceiling in insurance raised to 74% and launch of national Single window system and enhanced ceiling of FDI through automatic route for facilitating increased investment in  services sector. Compared to both 2020-21 and 2021-22 years Service sector performance as such shown greater buoyancy and resilience in 2022-23. Greater pick up in almost all  sub sectors of service sector namely tourism, hotels, health, education transport and real estate , information technology  business processes management  E commerce etc were responsible for making the vibrancy of services sector.If meticulously planned and properly exploited, Given the favourable factors like Demographic Dividend, supply of manpower and India all set to become the largest English speaking (using) country in the world can not only utilise emerging opportunities in services sector but also sustain  and maintain Vibrancy of the sector in the years to come.