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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