AN OVERVIEW OF SERVICE SECTOR IN INDIA: AN ENGINE FOR INCLUSIVE GROWTH

India’s service sector is characterised by its magnitude and vitality accounting for more than 55% to gross domestic product (GDP) which is gradually increasing 10 % growth per annum and contributing around 25% to total employment and having major allocation in FDI inflows and 33% of exports total with an expected growth of 27.4 % in 2010-2011. The data pertaining to various aspects of service sector was collected from secondary source such as published articles, journals and reports. The paper aims to analyse the growth and performance and also challenges faced by service sector in India. The results revealed that among different countries India ranks 12th position sharing service sector to Indian economy The services sector growth was significantly faster than the 6.6 per cent for the combined agriculture and industry sectors annual output growth during the same period. Further, India with a services sector share of 52 per cent in national GDP in 2009 and 55.2 per cent in 2009-10 compares well even with the developed countries in the top 12 countries with the highest overall GDP. The findings revealed that there was increase in share of service sector to countries GDP at current prices from 30.5 to 55 % during 1950-2010. The findings also conveys that the performance of service sector such as communication, transportation and storage was high with an growth of 15 % in 2009-10 when compared to other sectors and hotels and restaurants where found to be negative growth rate in the economy. Further, the major challenge in service sector was to retain the competitiveness and preserve the traditional service sectors such as shipping and tourism. Further, there is lot scope for India’s domestic market such as sectors like education, accounting and health care service. Hence the study suggest that if these challenging issues can be taken care still the service sector can be boosted with good optional growth for offering many employment opportunities and also maintaining balance of trade.