Service Sector Essay

784 Words2 Pages

Chapter-1
Introduction

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 …show more content…

Overview of the industry and its contribution in the Service Sector

A bank is defined as a financial institution that provides banking and other financial services to their customers. 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 …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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