India has the Second Fastest Growing Services Sector with Compound
Annual Growth Rate at 9.0 Per Cent
India has the second fastest growing services sector with its Compound
Annual Growth Rate at 9.0 per cent, just below China’s 10.9 per cent, during
2001 to 2012. Also, India ranked 12th in terms of services
Gross Domestic Product (GDP) in 2012 among the world’s top 15 countries in
terms of GDP. While services share in World GDP was 65.9 per cent and in
employment was only 44 per cent in 2012, in India, they were 56.9 per cent and
28.1 per cent respectively.
GDP
Services constitute a 57 per cent share in GDP at
factor cost (at current prices) in 2013-14, an increase of 6
percentage points over 2000-01. Despite deceleration, services GDP growth at
6.8 per cent was above the 4.7 per cent overall GDP in 2013-14. The growth rate
of the combined category of trade, hotels, restaurants, transport, storage, and
communications decelerated to 3.0 per cent while financing, insurance, real
estate, and business services grew robustly at 12.9 per cent.
FDI
In 2013-14, FDI inflows to the services sector (top
five sectors including construction) declined sharply by 37.6 per cent to US$
6.4 billion compared to an overall growth in FDI inflows at 6.1 per cent
resulting in the share of the top five services in total FDI falling to nearly
one-sixth.
Exports
India’s increase in share in world services exports
from 0.6 per cent in 1990 to 3.3 per cent in 2013 was faster than in
merchandise exports. Exports of software services, accounting for 46 per cent
of India’s total services exports, decelerated to 5.4 per cent in 2013-14,
travel, accounting for a nearly 12 per cent share, witnessed negative growth of
0.4 per cent.
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