The services sector is the dominant sector in India's economy, accounting for over 55% of GDP. It has attracted significant foreign investment and exports, and provides large-scale employment. Key services that are growing include tourism, with foreign tourist arrivals up 9.7% in 2016; IT-BPM, which grew by 8.1% in 2016-17; and the real estate sector, which saw foreign investment more than double in the first half of 2017 compared to all of 2016. Research and development services and the space sector, including satellite launches, also showed increasing revenues and market share globally.

1. Dr. Amitabh Mishra 1
IMPORTANCE
OF
SERVICES SECTOR
(According to Economic Survey 2017-2018)

2. Dr. Amitabh Mishra 2
IMPORTANCE OF SERVICES SECTOR
(Economic Survey 2017-2018)
 India’s services sector covers a wide variety of
activities such as-
 Trade,
 Hotel and restaurants
 Transport, storage and communication
 Financing, insurance, real estate
 Business services, community, social and personal
services
 And services associated with construction.

3. Dr. Amitabh Mishra 3
 The services sector is the dominant sector in India’s GDP. It has
attracted-
 Significant foreign investment flows.
 Contributed significantly to exports.
 As well as provided large-scale employment.
 The Services sector, has 55.2% share in India’s Gross Value Added
(GVA) and continued to be the key driver of India’s economic
growth contributing almost 72.5% of GVA growth in 2017-18,
(Gross value added (GVA) is the measure of the value of goods and services produced in an area,
industry or sector of an economy. In national accounts GVA is output minus intermediate
consumption; it is a balancing item of the national accounts' production account)

4. Dr. Amitabh Mishra 4
Tourism
 India’s Tourism sector has been performing well.
 Foreign Tourist Arrivals (FTAs) growing by 9.7% to 8.8
million.
 Foreign Exchange Earnings (FEEs) at 8.8% to US$ 22.9
billion in 2016.
 FTAs during 2017 were 10.2 million, with a growth of 15.6%,
while FEEs from tourism were US$ 27.7 billion, with a
growth of 20.8% over 2016.
 Domestic tourist visits (DTV) grew by 12.7% to 1,614 million
in 2016 from 1,432 million in 2015. Tamil Nadu, Uttar
Pradesh, Andhra Pradesh, Madhya Pradesh and Karnataka
were the Top 5 Destination States in 2016.

5. Dr. Amitabh Mishra 5
IT-BPM
 India’s Information Technology– Business Process Management
(IT-BPM) industry grew by 8.1% in 2016-17 to US$ 139.9 billion
(excluding e-commerce and hardware) from US$129.4 billion in
2015-16, as per NASSCOM data.
 IT-BPM exports grew by 7.6% to US$116.1bn from US$ 107.8
billion during the same period.
 E-commerce market is estimated at US$ 33bn, with a 19.1% growth
in 2016-17.

6. Dr. Amitabh Mishra 6
Real Estate
 The Indian Real Estate sector has begun to show signs of
improvement with the total FDI of US$ 257mn in H1 2017, which is
more than double the total FDI in 2016 full year.
 Some of the recent reforms and policies taken by the GoI related to
Real Estate Sector include the Pradhan Mantri Awas Yojana
(PMAY) with the government sanctioning over 3.1 million houses
for the affordable housing segment in urban regions till November
2017. Of this, about 1.6 million houses have been grounded and are
at various stages of construction, and about 0.4 million houses have
been built under the mission.

7. Dr. Amitabh Mishra 7
R & D
 The professional Scientific & Technical activities which include
R&D services grew by 17.5% and 41.1% in 2014-15 and 2015-16
respectively.
 India-based R&D services companies, which account for almost
22% of the global market, grew at 12.7%. However, India’s gross
expenditure on R&D has been at around 1% of GDP. India ranks
60th out of 127 on the Global Innovation Index (GII) 2017,
improving from 66th rank in 2016.

8. Dr. Amitabh Mishra 8
SPACE
 In the case of Satellite Launching, as on March 2017,
PSLV successfully launched 254 satellites.
 Foreign exchange earnings of India from export of
satellite launch services increased noticeably in 2015-16
and 2016-17 to Rs 394 crore and Rs 275 crore from Rs.
149 crore in 2014-15.

9. Dr. Amitabh Mishra 9
 India’s share in global satellite launch services revenue
has also increased to 1.1% in 2015-16 from 0.3% in
2014-15.
 Antrix foresees greater utilization of PSLV, GSLV and
GSLV-Mk-III launch services by the international
community for launching their Low Earth Orbit (LEO)
satellites.