Service Sector In India

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A. Overview of the service sector and its contribution in the Economy There are three sectors that together make the economy of a country, namely primary sector (like farming, fishing, etc.), secondary sector (like manufacturing, etc.) and tertiary sector (services provided) .The tertiary sector provides services which are intangible in nature. Services include activities like retail shops, banking, hospitality, real estate, education, health, social work, etc. The service sector is a very crucial part of the economy. Service sector in India has grown up by 55% in India’s GDP 2006-2007. Service Sector business’s is now increasingly focuses on so called “knowledge economy”. They need to keep ahead of other businesses by understanding what are…show more content…
A firm which provides fundamental banking services, such as accepting deposits and providing loans is commonly understood as a Bank. There are also non banking firms that provide certain banking services without meeting the legal definition of a bank. Banks are a subset of the financial services industry. A system which offers cash management services for customers, reporting the transactions of their accounts and portfolios, throughout the day is known as a Banking System. In India the banking sector, should not only be hassle free but it should be able to meet the new challenges posed by the technology and other external and internal factors. For the past 30 years, banking system in India has several outstanding achievements to its credit. The Banks are the main participants of the financial system in India. Several facilities and opportunities are offered by the Banking Sector to the customers. Every bank safeguards the money and valuables and provides loans, credit, and payment services, such as checking accounts, money orders, and cashier’s cheques. The banks also offer investment and insurance products. There are different models for cooperation and integration among finance industries that have emerged, some of the traditional distinctions between banks, insurance companies, and securities firms have diminished. In spite of these changes, banks continue to…show more content…
Contributing to its high growth are many critical sectors, amongst which ‘financial services sector’ is unarguably one of the most distinguished sectors of Indian economy. The role of financial sector in shaping fortunes for Indian economy has been even more critical, as India since independence lacked prowess of a resilient industrial sector. This prompted India to depend on other sectors for its sustenance. These other sectors mostly constituted of ‘financial service sector and ‘agricultural sector’. India’s watershed decision to nationalise 14 commercial banks in 1969 validated how critical was ‘financial sector’. Its importance after economic reforms of 1992 has grown only manifolds to the extent that today it presently contributes to over 6% of India’s GDP. Dynamic growth of financial services sector during post reform age has helped it in assuming such an important place in the economy of India. Unlike in past when financial services sector mainly constituted of banking sector, today financial sector has broaden its reach to include sectors like insurance services, non-banking financial services, co-operatives, pension funds, mutual funds, capital markets etc. especially employment generated by banking and insurance sector every year runs in millions with improved availability of credit, the Indian economy during past two decades has managed to march towards higher economic growth.

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