SERVICE SECTOR AND ITS GROWTH by O3cHK9mW

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									GROUP NO:19

  55- SONY NAIDU

  56- STEADIN FERNANDES

  57-SUSAN ABRAHAM
SERVICE SECTOR
AND ITS GROWTH
Service – Tertiary Sector
  It mainly consists of following:
   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
Reasons for growth
   Strong growth in foreign demand

   Liberalisation

   Sophistication in the information
    technology
Contd…
 Foreign Investment and
  Deregulation
 (36% between 1992-2002)
 Greater private sector participation

 Increased private consumption of

  services ( 64 % of India’s GDP-
  Europe-58%,Japan-55%)
Trade in Services sector
FDI inflows in Service sector
Services as proportion of GDP
Contribution of Service sector
Growth rate in service sector
Importance of service sector
Changes in budget and
its impact
   INFORMATION TECHNOLOGY
     Current scenario: Is having a
    annual growth rate of around 26%
    to touch $40.8 billion by
    March’08,inclusive of ITES
    segment and hardware industry.
After Budget: The hike in excise duty
  from 8% to 12% on packaged
  software can negatively affect
  application development players.
   BANKING & FINANCE
     Current scenario:Interest rates
    are on high and can reduce once
    the peak season is over. Non-food
    credit is growing around 23-25%
    and aggregate deposits are seen
    rising 21-23%.
After Budget: The main effect is on
  agricultural banking due to loan
  waiver. The way the
  reimbursement will be done will
  determine the extent to which this
  impact is mitigated.
   TELECOM:
      Current scenario: India is now the
    third largest wireless market in the
    world at 242.4 million subscribers
    after China and US. And is
    expected to touch 490 million by
    Mar’12.
    Reasons for growth being rising
    incomes, ever-falling handset costs
    and local tariffs.
   After Budget: The excise duty on
    wireless data card from 16% to nil
    results in the reduction of effective
    duty from 21.7% to 4%and is
    marginally positive. This will help
    raise penetration of the wireless
    internet services.
   HEALTH SECTOR:
     Current scenario: India has just
    1.5 hospital beds per 1000 of its
    people –equivalent to about one
    third of the world average. Thus it
    is very important to allocate proper
    funds and see to it that these are
    properly utilised.
   After Budget: Rs.16,534 crore is
    allocated for health care spending
    in 2008-2009. And also there is
    also tax exemption for 5 years that
    is provided for hospitals set up in
    non-urban areas. This will help
    many entrepreneurs to focus on
    the health sector.
   DEFENCE:
    Current scenario: The expenditure
    allocated from budget is usually
    around 3% of the GDP, 96,000
    crore for year 207-2008.
After budget: Rs.1,05,600 crore is
earmarked for defence for the year
2008- 2009. The increase is by
10% over the previous year. But
the expenditure for the year falls
below 2% of the GDP for the first
time.

								
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