The service sector is the largest contributor to GDP in India. Thissector accounts for 54 per cent of economic output and grew by an unprecedented 9.8 per cent. IMF forecast estimates that by 2010 this will be around 58 per cent, on par with a midlevel developed country. The service sector has been driven by IT exports which have grown at a CAGR of 26 per cent over the last 4 years. This was mainly the result of significant increases in the demand for domestic services.
As per the statistics of developed countries, services account for around 75 per cent of the jobs and 70 per cent of the Gross National Product (GNP) capital. In the industrial market, many services are offered to facilitate the process of production, finance and marketing. Manufacturers, wholesalers and retailers sell some services along with goods. They buy many services in the conduct of their business. There are specialized services firms selling their services to the industry. Industry requires the services of transport, storage, finance, insurance and communication, as these facilitate business operations. The service sector comprises trade, hotels and restaurants, transport, storage, communication, financing, insurance, real estate and business services, community services (public administration and defence) and other services. This sector provides services of final consumption nature as well as intermediate nature, the latter accounting for a major share. Substantial parts of services such as transport and communications are in the form of intermediate inputs for production of other goods and services. A growing urbanization too has contributed to the growth in service sector.
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