106 DALAL STREET INVESTMENT JOURNAL I JULY 22 - AUG 4, 2019 DSIJ. in^
Financial Review For FY19
Service
T
he economic segment that provides services to its
consumers is the tertiary sector, which is the
highest contributor to the GDP in almost every
economy. The tertiary sector includes a wide range
of businesses, financial institutions, schools,
restaurants, etc. For an economy to flourish, it is very pertinent
for the three sectors (primary, secondary and tertiary) to grow
and evolve. In the developed countries, the service sector is
more dominant than the others and, over the years, in terms of
output, income and employment, the service sector is turning
out to be the fastest growing sector that is contributing a huge
chunk to the GDP. If we were to compare the productivity per
worker in the service sector to that of the agriculture and
industrial sector, we will find that the service sector has higher
productivity. If the agricultural sector exhibits stagnancy, the
enormous number of the new activities that are constantly
being added to the service sector can aid the economic growth
of the country. Hence, it is evident that the service sector is
playing a major role in the economic development of any
country.The service sector requires relatively less capital investment
than the other sectors. Also, a majority of the activities of the
service sector require relatively lesser space for operations as it
is a more of a knowledge-intensive sector as the inputs of
human resource are necessary for the growth of the sector.Service sector in India
The service sector contributes more than 50 per cent to the
Indian GDP since early 2000s. According to Statistics Times
Feb 2019 report, the services constitute 61.5 per cent of the
GDP, which is approximately $1500 billion, thereby putting
India in the eighth position in the world. The tertiary sector
was contributing only around 30 per cent in 1950s, which then
rose to 42.8 per cent in 1990s and in 2007, the service sector
jumped to contributing 53 per cent, while the primary and
secondary sectors contributed 18 per cent and 29 per cent,
respectively. According to latest reports, we have service sector
contributing 61 per cent to the GDP and this highlights the fact
that the share of tertiary sector to the GDP has been constantly