For UPSC aspirants, comprehensive preparation often involves meticulous study of various subjects, including the intricacies of the Indian economy. Understanding the dynamics of the service sector within this economy is paramount. The service sector, characterized by its diverse range of activities such as banking, education, healthcare, and information technology, plays a pivotal role in India’s economic landscape. NCERT notes on the Indian economy about the service sector provide invaluable insights into its growth, challenges, and significance. These notes serve as a foundational resource for aspirants, offering a structured understanding of concepts, statistical data, and policy frameworks essential for navigating the UPSC examination with confidence. Delving into the intricacies of the service sector through NCERT notes equips aspirants with a nuanced understanding crucial for answering questions and analyzing contemporary issues in the realm of Indian economic development during their UPSC journey.
Introduction to the Service Sector:
- The service sector is characterized by the production of intangible goods, focusing on services rather than tangible products.
- It encompasses diverse industries such as warehousing, transportation, information services, securities and investment services, professional services, waste management, healthcare, social assistance, arts, entertainment, and recreation.
- Economies primarily driven by the service sector are considered more advanced compared to those relying on industry or agriculture. The service sector is also commonly referred to as the tertiary sector.
- The expansion of the service sector in India is closely associated with the economic reforms initiated in the 1990s. While it began to show growth in the mid-1980s, the sector experienced significant acceleration in the 1990s, prompted by India’s response to severe balance of payments issues.
- The service sector not only dominates India’s economic landscape but has also attracted substantial foreign investment, contributing significantly to exports and creating extensive employment opportunities.
- Government initiatives, such as smart cities, clean India, and digital India, support the services industry, fostering an environment that enhances the sector’s strength.
- The service sector holds the potential to unlock a multi-trillion dollar opportunity, paving the way for mutually beneficial growth across nations.
Challenges Faced by the Service Sector:
- The immediate challenge confronting the service sector, which encompasses diverse activities, lies in revitalizing its growth.
- India’s economic growth has predominantly been driven by the services sector, playing a pivotal role in the overall economic landscape.
- While a conventional business-as-usual approach has contributed to this growth, a more targeted strategy focusing on high-impact services could lead to exponential economic gains.
- Despite notable examples set by software and telecom services, there are other crucial services, such as tourism (including medical tourism), shipping, and logistics, that warrant attention.
- The tourism sector, in particular, holds immense potential for India, considering the projected increase in world tourist arrivals and the growth of foreign tourist arrivals (FTAs) in emerging countries.
International Comparison:
- In terms of Foreign Direct Investment (FDI), the UNCTAD World Investment Report (WIR) 2022 ranks India as the 7th top host economy among the top 20 for the year 2021. FDI inflows in India witnessed an increase from US$ 74,391 million in FY 19-20 to US$ 81,973 million in FY 20-21. Notably, India achieved the highest annual FDI inflows of US$ 84,835 million in FY 21-22, surpassing the previous year’s FDI by US$ 2.87 billion.
- The report highlights the potential far-reaching consequences of the conflict in Ukraine on international investment, economic development, and Sustainable Development Goals (SDGs) worldwide. It anticipates a slowdown in world economic growth to 2.5% in 2022, further dropping to 2.2% in 2023.
- India’s Dominance in Global Services Exports:
- India maintains a significant presence in global services exports and has consistently ranked among the top ten services-exporting countries.
- In 2021, India increased its share in world commercial services exports from 3% in 2015 to 4% in 2021. According to the Economic Survey 2022-23, the overall service sector’s Gross Value Added (GVA) is expected to grow by 9.1% in 2022-23.
Share of Services in Income and Employment:
- While the share of services in employment is high for many developed countries, the gap between the share of services in income and employment is relatively less. In the case of India and China, there exists a substantial gap, with India having a wider gap than China.
- The employment in services (as a percentage of total employment, according to the World Bank and the Periodic Labour Force Survey) in India was reported at 32.3% in 2022.
- The urban unemployment rate in India also showed a decline from 9.8% in the quarter ending September 2021 to 7.2% in the quarter ending September 2022, as per the Periodic Labour Force Survey.
Service Sector of India
- India’s services sector has emerged as a prominent sector in terms of its contribution to national and state incomes, trade flows, FDI inflows, and employment.
- Over the years, India’s overall and services growth rates have outpaced those of the world.
- This sector has been pulling up the growth of the Indian economy with a great amount of Stability.
- As per the new method of India’s National Accounts statistics, the service sector accounted for 53% of India’s Gross Value Added(GVA) at basic prices (current prices) in 2021-22.
- advanced estimate GVA of the service sector is estimated to grow by 9.1% in 2022-23.
Growth of India’s Services Sector (GVA at Basic Price)
| Sector | Share in 2020-21 | 2021-22 | 2022-23 |
| Total Services | 53 | – | – |
| Trade, Hotels, Transport and Communication | 16.9 | -8.4 | -18.2 |
| Financial Services | 20.9 | -1.5 | 4.0 |
| Public Administration | 15.2 | -4.6 | 10.7 |
Performance of Services Economic Survey Sector 2022-2023
Two Growth Phases in the Export of Services:
- The growth rates of India’s services exports and global services exports can be delineated into two distinct phases. The first phase extended until 1996, characterized by a scissor-like movement between the two growth rates. The second phase, post-1996, witnessed India’s services exports growing at a higher rate than the global average in most years, except 2009. During this second phase, India’s growth consistently surpassed the global trend during upswings but approached convergence during downswings.
- The services sector is poised to grow at a rate of 9.1% in FY23, reflecting a robust Year-on-Year rebound of 7.8%. In the Financial Year 2022-23, the services sector exhibited substantial growth (YoY) at 8.4%, rebounding from a contraction in the previous Financial Year (2021-22).
- According to the First Advance Estimates, Gross Value Added (GVA) in the services sector is projected to grow at 9.1% in FY23, primarily driven by a remarkable 13.7% growth in the contact-intensive services sector.
- The survey highlighted a positive uptick in the Purchasing Managers Index (PMI) for services, expanding to 58.5 in December 2022. This expansion was attributed to an overall easing of retail inflation, resulting in reduced price pressures on inputs and raw materials.
- India secured a position among the top ten services-exporting countries in 2021, with its share in world commercial services exports escalating from 3% in 2015 to 4% in 2021.
- Despite the challenges posed by the Covid-19 pandemic and geopolitical uncertainties, India’s services exports demonstrated resilience. This resilience was fueled by increased demand for digital support, cloud services, and infrastructure modernization.
- India’s services exports reached US$ 254.5 billion in FY22, marking a remarkable growth of 23.5% over FY21. Additionally, there was a notable growth of 32.7% in services exports during April-September 2022 compared to the same period in FY22.
- Services imports witnessed a substantial rise by 25.1% between FY22 and FY21, reaching US$ 147.0 billion. Moreover, services imports recorded a robust growth of 36.7% in April-September 2022 compared to the corresponding period in FY22. This increase in service imports was primarily attributed to payments for transport services, travel, and other business services.
Performance of Service Trade (Values in USD Billion)
| Total Services | 2020-21 | 2021-22 | April-September 2022 (P) |
| Maintenance and Repair Service | 0.3 | 0.5 | 0.03 |
| Manufacturings Repass Sergical Inputs Owned by Others | 0.2 | 0.1 | 0.5 |
| Transport | 21.9 | 0.6 | 0.1 |
| Travel | 8.5 | 9.5 | 0.6 |
| Construction | 2.6 | 11.5 | 0.1 |
| Insurance and Pension Services | 2.4 | 9.1 | 0.8 |
| Financial Services | 4.3 | 16.3 | 1.4 |
| Charges for the Use of Intellectual Property | 1.3 | 10.5 | 0.1 |
| Telecommunications, Computer and Information Services | 103.1 | 13.8 | 1.0 |
| Personal, Cultural, and Recreational Services | 49.2 | 2.6 | 19.8 |
| Other Business Services | 2.3 | 2.6 | 32.7 |
| Government Goods and Services | 0.6 | 2.9 | 35.8 |
| Others | 9.5 | 1.6 | 19.4 |
| Performance of Service Trade (Values in USD Billion) | |||
| Exports | 206.1 | 254.5 | 117.5 |
| Imports | 117.5 | 147.0 | 156.1 |
Share of Services at the State and UT Level
- The services sector holds a majority share of over 50% in the Gross State Value Added (GSVA) in 12 out of the 33 States and UTs.
- Chandigarh leads with an exceptionally high services share in GSVA at 74%, while Sikkim has the lowest at 24.25%. Notably, Sikkim’s services share in GSVA has increased from over 18% in 2018-19 to over 24% in 2020-21.
- Over the past three years, Himachal Pradesh and Odisha have seen an increase of over 4% in the services share in GSVA.
- Maharashtra and Karnataka are the top contributors to services GSVA, with GVA by the services sector at 15.1 lakh crore and 9.71 lakh crore, respectively, in 2020-21.
Major Services in India
- The service sector plays a crucial role in the Indian economy, contributing to 55.2% of the Gross Value Added (GVA).
- The government has implemented various initiatives, including digitization, e-visas, infrastructure status for logistics, and the Start-up India scheme for the housing sector, to boost the services sector. The performance of major services and recent government policies aimed at enhancing sector growth are highlighted below:
Tourism
- The tourism sector is a significant contributor to GDP growth, foreign exchange earnings, and employment. However, the Covid-19 pandemic has severely impacted global travel and tourism, including India.
- According to the World Tourism Barometer of the United Nations World Tourism Organization (November 2022), international tourist arrivals reached 63% of the pre-pandemic level in the first nine months of 2022.
- The International Tourist Arrivals (ITA) had reached 1.5 billion in 2019 but decreased to 381 million in 2020, resulting in an estimated loss of US$ 1.3 trillion in export revenues.
- This decline continued in 2021, with ITA worldwide being 20% lower than the same period in 2020 and 64% below 2019 levels.
- To curb the spread of the virus, the Indian aviation regulator, Director General of Civil Aviation (DGCA), suspended all commercial international flights in March 2020. This restriction has been extended until February 28, 2022.
- India secured the 10th position among the top 46 countries globally in the Medical Tourism Index (MTI).
- Additionally, according to the World Travel and Tourism Council, India holds the 6th rank in terms of travel and tourism’s total contribution to GDP in 2021.
- In 2018, India was positioned 22nd worldwide in international tourist arrivals. Moreover, India ranked 13th globally and 7th in Asia and the Pacific for tourism foreign exchange earnings in 2019, contributing nearly 2% to the world’s tourism foreign exchange earnings.
Swadesh Darshan Scheme
- The Swadesh Darshan Scheme, initiated in 2014-15 by the Ministry of Tourism and Culture, is a Central Sector Scheme designed for the integrated development of theme-based tourist circuits.
- The scheme’s objectives include promoting, developing, and harnessing India’s tourism potential. It provides Central Financial Assistance to State Governments and Union Territory Administrations for the infrastructure development of circuits. The scheme aligns with other initiatives like Swachh Bharat Abhiyan, Skill India, and Make in India, aiming to position the tourism sector as a significant engine for job creation and economic growth.
- The strategic objectives of the Swadesh Darshan Scheme encompass enhancing tourism’s contribution to local economies, creating jobs and self-employment opportunities for local communities, improving the skills of local youth in tourism and hospitality, increasing private sector investment in tourism and hospitality, and preserving and enhancing local cultural and natural resources.
PRASAD Scheme (Pilgrimage And Spiritual Augmentation Drive) Rejuvenation
- Launched in 2014-2015 under the Ministry of Tourism, the PRASAD scheme focuses on developing and identifying pilgrimage sites across India to enhance the religious tourism experience. It aims to integrate pilgrimage destinations in a prioritized, planned, and sustainable manner for a complete religious tourism experience. The scheme plays a crucial role in promoting holistic development and the overall growth of religious tourism in India.
ITDC (Indian Tourism Development Corporation)
- Established in October 1966, the Indian Tourism Development Corporation (ITDC) has played a pivotal role in the progressive development, promotion, and expansion of tourism in India.
- ITDC operates hotels, and restaurants, and provides transport facilities for tourists. Additionally, it engages in the production, distribution, and sale of tourist publicity literature, offering entertainment and duty-free shopping facilities to tourists.
- Presently, ITDC manages a network comprising three Ashok Group of Hotels, one Joint Venture Hotel, one restaurant, five ATT Units, 15 Duty-Free Shops at Sea ports, and one Sound and Light show.
Hotel Industries in India
- The Indian hospitality industry, led by the hotel market, has become a key sector driving the economic growth of the country. Hotels in India are classified based on location, such as city hotels, airport motels, resorts, etc., and the level of services they offer.
- In India, the hotel industry exhibits diversity in terms of service categories (upscale, mid-market, and economy) and themes (boutique hotels, heritage hotels, etc.). Projected to reach a value of INR 1,210.87 billion by the end of 2023, the hotel industry is expanding at a Compound Annual Growth Rate (CAGR) of 13% from 2018 to 2023. This growth is attributed to the high influx of foreign tourists and business delegates.
- Kerala is poised to lead in providing hospitality services, boasting a total of 440 approved hotels. Additionally, Maharashtra, Gujarat, Rajasthan, and Tamil Nadu make up the top five states excelling in hospitality services. The Indian Government’s decision to permit 100% Foreign Direct Investment (FDI) in tourism, including construction projects and the development of hotels, resorts, and recreational facilities, serves as a catalyst for the establishment of new hotels across the country.
Transport-Related Services
Shipping
- Various transport-related services contribute significantly to India’s economic landscape. The development of ports is pivotal, handling approximately 90% of export-import cargo by volume and 70% by value in India. As of March 2021, the total cargo capacity of all ports has increased to 1,246.86 Million Tonnes Per Annum (MTPA) from 1,052.23 MTPA in March 2014.
- Kamarajar Port in Chennai exhibited the highest growth at 70.9%, followed by JNPT Port at 27.9%. The turnaround time at the JNPT port is the lowest (1.16 days), while Visakhapatnam and Mormugao ports register the highest turnaround time. With India holding a 0.9% share in the world fleet as of January 2019, the country boasts 13 major ports and around 200 non-major ports.
Port Services
- Port services are intricately linked to shipping services and merchandise trade. The performance of these services relies on the efficiency of ports.
- The Maritime Agenda 2010-20 addresses issues such as full mechanization of cargo handling, specified draft levels in major and hub ports, and the relocation of Indian container transshipment from foreign ports to Indian ports.
Sagarmala
- To leverage India’s extensive coastline, navigable waterways, and strategic location on international maritime trade routes, the Government of India introduced the ambitious Sagarmala Programme.
- Approved by the Union Cabinet on March 25, 2015, and featuring a National Perspective Plan (NPP), this program aims to drive port-led development in India.
- The Sagarmala vision is centered on reducing logistics costs for both EXIM (Export and Import) and domestic trade with minimal infrastructure investment.
Business Services
- Business services encompass a range of offerings, including computer-related services, research and development, accounting services, legal services, and machinery rental.
- The Information Technology (IT) industry has been a key player in India’s global standing. India’s IT-BPO (Business Process Outsourcing) sector has significantly contributed to the country’s economic growth. The development of software in India began in the 70s, with companies like Infosys, Wipro, and Satyam establishing themselves during this period.
- India introduced the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021, exercising its authority under Section 87(2) of the Information Technology Act, 2000. These rules superseded the earlier Information Technology (Intermediary Guidelines) Rules, 2011, and were officially notified on February 25, 2021, taking effect from May 26, 2021.
E-commerce Sector
- The Indian e-commerce sector holds direct significance for Micro, Small, and Medium-sized Businesses (MSME), creating positive ripple effects across other industries through funding, technology, and training.
- Predictions indicate that India’s e-commerce market will surpass the United States by 2034, becoming the second-largest globally.
- The sector’s growth is anticipated to be fueled by technological innovations, encompassing digital payments, hyper-local logistics, analytics-driven customer engagement, and digital marketing.
- India is also set to introduce an Open Network for Digital Commerce (ONDC), facilitating e-commerce platforms to display products and services from various sources by synchronizing search results.
- The industry’s expansion is fueled by factors such as increased smartphone penetration, growing affluence, and affordable data prices, providing momentum for e-retail growth.
Digital Financial Services
- Digital financial services encompass all financial transactions conducted through digital devices, with various offerings from banks and other institutions.
- Shopping through mobile phones and service provider apps is a widely popular digital financial service. Digital finance involves delivering traditional financial services through devices like computers, tablets, and smartphones.
- Initiatives like Jan Dhan Adhaar Mobile (JAM) have promoted digital platforms, supported by regulatory frameworks.
- The Reserve Bank of India (RBI) introduced digital e-Rupi, and Prime Minister Narendra Modi launched 75 Digital Banking Units (DBUs) across districts to enhance financial inclusion. DBUs offer diverse digital banking facilities, including savings account openings, e-checks, fixed deposits, loan applications, and bill payments.
IT-BPM
- The Information Technology-Business Process Management (IT-BPM) sector is a crucial component of India’s services landscape. In 2020-21, IT-BPM revenues (excluding e-commerce), according to provisional estimates by NASSCOM, reached US$ 194 billion, with a 2.26% Year-over-Year (YoY) growth, leading to the addition of 1.38 lakh employees.
- Within the IT-BPM sector, IT services constitute a majority share (> 51%), maintaining consistency over several years. The share of software and engineering services in the IT-BPM sector consistently increased annually. BPM services maintained a share of 19.8%, while hardware services slightly improved to 8.3% during 2020-21.
- During the same period, total revenue in the IT-BPM sector (excluding hardware and e-commerce) grew at 2.1% (YoY), with a significant portion coming from exports. Export revenues, contributing US$ 149.1 billion in 2020-21, witnessed a growth of 1.93%. The United States remained the primary source of export revenues, accounting for about 62% of total IT-BPM exports (excluding hardware and e-commerce). The Indian IT-BPM Industry has consistently been at the forefront of technological advancements and global service provision.
- Over the past few decades, the industry has witnessed significant growth, with its size reaching approximately US$ 177 billion by March 2019. This sector plays a crucial role in the economy, contributing substantially to employment growth and value addition.
National Broadband Mission
- Launched as part of the National Digital Policy 2018, the National Broadband Mission (NBM) was initiated in 2019. The Ministry of Communications introduced the National Broadband Mission to facilitate universal and equitable access to broadband services across the country, particularly in rural and remote areas. Utilizing Bharat Net, broadband services have already reached 142,000 village blocks, and the latest mission aims to provide broadband to remote hospitals, schools, and offices.
Real Estate
- The real estate sector stands out for its substantial contribution to employment generation. Fueled by increasing transparency and returns, there has been a surge in private investment in the sector. In 2020, Indian real estate attracted US$ 5 billion in institutional investment, equivalent to 93% of the transactions recorded in the previous year.
Research and Development (R&D)
- India-based R&D services companies, constituting almost 22% of the global market, experienced growth at 12.7%. India’s gross expenditure on R&D has consistently hovered around 1% of GDP. Notably, India climbed two spots and secured the 46th position in the Global Innovation Index 2021 ranking by the World Intellectual Property Organization.
Space
- Since its inception in the 1960s, the Indian Space Programme has undergone significant growth. This expansion encompasses indigenous space transportation systems, space assets for satellite communication, meteorology, space science, and navigation, and ground infrastructure, along with a myriad of operational programs applying space technology to societal needs.
- Key developments in the space sector include the establishment of NewSpace India Limited (NSIL) to own operational launch vehicles and space assets of ISRO. Another crucial step was the formation of the Indian National Space Promotion and Authorisation Centre (IN-SPACe), serving as a promoter and regulator of space activities in India by non-government/private entities.
- Within a little over a year since its announcement, IN-SPACe received nearly 40 proposals from diverse entities, covering a broad spectrum of activities in the space domain. The third vital step involved providing a predictable, forward-looking, well-defined, and enabling regulatory regime for space activities in the country. Notably, five private satellites were tested at ISRO facilities, and four student satellites were launched aboard the PSLV C-51.
Bhuvan
- Bhuvan, an Indian web-based utility, allows users to explore a range of map-based content, including thematic maps related to disasters, agriculture, water resources, and land cover. Launched by ISRO in its beta version on August 12, 2009, Bhuvan provides detailed imagery of Indian locations with spatial resolutions ranging up to 1 meter. Presently, 177 cities have high-resolution data sets, while the rest of the country is covered by 2.5 m resolution imagery. Notably, the images exclude any military installations in India due to security concerns.
Indian Economy
- The National Remote Sensing Agency played a pivotal role in developing this product. ISRO utilized data from satellites such as Resourcesat-1, Cartosat-1, and Cartosat-2 to acquire the best possible imagery of India.
Drone Rules, 2021
- In March 2021, the Ministry of Civil Aviation (MoCA) released the UAS Rules, 2021, which were deemed excessively stringent and restrictive due to extensive paperwork, mandatory permissions for each drone flight, and limited free-to-fly green zones. In response to feedback, the government decided to annul the Unmanned Aircraft Systems (UAS) Rules, 2021, replacing them with the more liberalized Drone Rules, 2021, notified on August 25, 2021.
Key features of Drone Rules 2021 include:
- Elimination of several approvals, reducing the total forms from 25 to 5.
- Reduction of the remote pilot license fee from 3000 (for large drones) to 100 for all drone categories, with the types of fees reduced from 72 to 4.
- Inclusion of drones up to 500 kg under regulations, compared to the previous limit of 300 kg.
- Authorization for foreign-owned and controlled Indian companies to conduct drone operations in India.
- Exemption of remote pilot license for micro drones (for non-commercial use) and nano drones.
- Reduction of the maximum penalty under the new rules from 5 lakhs to 1 lakhs.
- Legal Services
- Legal services have experienced consistent growth at a rate of 8.2% from 2005-06 to 2011-12.
- The Indian legal profession comprises approximately 1.2 million registered advocates.
- The National Legal Services Authority (NALSA) was established under the Legal Services Authorities Act, of 1987, to oversee legal aid programs, formulate policies, and ensure the availability of services under the Act.
Accounting and Audit Services
- Accountancy service providers in India self-regulate through statutory bodies like the Institute of Chartered Accountants of India (ICAI), the Institute of Cost and Work Accountants of India, and the Institute of Company Secretaries of India (ICSI).
- The outsourcing market, especially in areas like actuarial and accountancy services, depends on high-quality expertise, knowledge of insurance and pension laws in target countries, and incentives for foreign firms to establish back offices in India.
- Collaborations between domestic firms and foreign entities can facilitate the acquisition of expertise and market access that may not be individually available to domestic accountancy firms.
Communication Services
Some Communication Services are as Follows
Telecom and Related Services
- India has made significant strides in the telecom sector, boasting the second-largest telephone network globally, surpassed only by China.
Postal Services
- India Post holds the title of the largest postal network globally, providing affordable postal services to citizens through its extensive network of 1.55 lakh post offices, with 1.39 lakh in rural areas and 15,736 in urban areas.
- The Department of Posts plays a vital role in disbursing wages to Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) beneficiaries.
- In 2022, all 1.5 lakh post offices transitioned to the core banking system, enhancing financial inclusion and providing access to accounts through net banking, mobile banking, ATMs, and facilitating online fund transfers between post office accounts and bank accounts.
Foreign Direct Investment (FDI) in India’s Services Sector
- While the categorization of FDI in services may be unclear, the cumulative FDI share primarily comprises the top 10 service sectors, encompassing both financial and non-financial services.
- These sectors align with the Department of Industrial Policy and Promotion (DIPP)’s services sector definition and include telecommunications, trading, computer hardware and software, construction, hotels and tourism, hospital and diagnostic centers, consultancy services, sea transport, and information and broadcasting.
- This grouping provides the most reliable estimate of FDI in services.
- To streamline and encourage investment, the government has implemented various measures, such as the introduction of the National Single-Window system, serving as a comprehensive solution for approvals and clearances required by investors, entrepreneurs, and businesses.
- In an effort to liberalize investment across industries, the government has authorized 100 percent foreign participation in telecommunication services, encompassing all services and infrastructure providers, through the Automatic Route.
- Additionally, the FDI ceiling in insurance companies has been increased from 49 to 74 percent under the Automatic Route. Moreover, the government has granted permission for 20 percent foreign investment in Life Insurance Corporation (LIC) through the Automatic Route.
Prelims Facts
- In which state was India’s first ‘National Investment and Manufacturing Zone’ proposed to be set up? Andhra Pradesh [UPPSC (Mains) 2010, IAS (Pre) 2016]
- Which organization was the first credit rating agency in India, aiming to evaluate the creditworthiness of a company? Credit Rating Information Services of India Limited (CRISIL) [UPPSC (Mains) 2008]
- Which agency releases the Index of Industrial Production to measure industrial performance in India? National Statistical Office (NSO) [BPSC (Pre) 2020]
- The function of developing tourism and the hotel industry in India is assigned to which organization? Indian Tourism Development Corporation (ITDC) [BPSC (Pre) 2020]
- Where is the Indian Diamond Institute (IDI) established? Surat [UPPSC (Mains) 2012]
- Which was the first Indian private service sector company to find a place in the global 500 list of ‘Fortune Magazine’? Reliance Industries Limited [UKPSC (Pre) 2006]
- When did the Government of India release the New Manufacturing Policy (NMP)? 4th November 2011 [CGPSC (Pre) 2016]
- In which year was BSNL established? 2001 [UPPSC Lower 2009]
- The Board for Industrial and Financial Reconstruction (BIFR) is related to what?
- Reconstruction and financing of sick units [UPPSC (Mains) 2002]
- During which Planning Commission was the All India Khadi and Village Industries Board set up? 1st Planning Commission [RAS/RTS (Pre) 1994]
- Where in India is the first rubber-based tire Metro being built? Nashik [UPPSC (Pre) 2021]
- The first large-scale steel plant in India is? TISCO at Jamshedpur [UPPSC (Mains) 2008]
- Which policy of the Government of India is responsible for the promotion and development of micro and small enterprises by supporting them in marketing their products and services? Public Procurement (Preference to Make in India) policy [Odisha PSC (Pre) 2018]
UPSC NCERT Practice Questions
1. Name one functioning activity of the tertiary sector.
(a) This sector gradually became associated with different kinds of industries.
(b) Activities in which natural products are changed into other forms through ways of manufacturing
(c) Produce a good by exploiting natural resources.
(d) Goods that are produced would need to be transported by trucks or trains and then sold in wholesale and retail shops.
2. Which of the following states is the best performer in terms as GSVA in the service sector?
(a) Maharashtra
(b) Karnataka
(c) Andhra Pradesh
(d) Himachal Pradesh
3. According to the Economic Survey of GOI 2022-2023 which of the following is correct?
(a) The services sector is expected to grow at 9.1% in FY23.
(b) India’s e-commerce market is projected to grow at 18 percent annually through 2025.
(c) Both a and b
(d) None of the above
4. Which one of the following sub-sector of the services sector in India has contributed the highest percent in the Annual Growth Rate of the GDP? MPPSC (Pre) 2000
(a) Real estate, ownership of dwellings and business services
(b) Community, social and personal services
(c) Transport, storage and communication
(d) Trade, hotels and restaurants
5. Consider the following statements.
1. Software is one sector, in which India has achieved a remarkable global brand identity.
2. The contribution of the services sector to the national economy both in terms of value addition and employment generation is growing over the year.
Which of the statements) given above is/are correct?
(a) Only 1
(b) Only 2
(c) Both 1 and 2
(d) Neither 1 nor 2
6. Consider the following statements.
1. Computer software has the highest percentage of share in service sector export in India.
2. Communication elvices has highest growth rate in service sector in Eleventh Five Year Plan.
Which of the statement (5) given above is/are correct?
(a) Only 1
(b) Only 2
(c) Both 1 and 2
(d) Neither 1 nor 2
7. Which one of the following services of the Indian Economy has the highest percentage of share in the services sector export?
(a) Computer software
(b) Financial and non-financial
(c) Computer hardware
(d) Legal consultancy
8. Which one of the following percentage of Foreign Direct Investment (FDI) is allowed in the Indian entities publishing newspapers and periodicals dealing with news and current affairs?¡AS (Pre) 2005
(a) 26%
(b) 49%
(c) 74%
(d) 100%
9. Which one of the following services is included in the services sector of Indian Economy? UPPSC (Pre) 2008
(a) Transport, storage and communication.
(b) Financing, insurance, real estate and business services.
(c) Community, social and personal services.
(d) All of the above
10. Consider the following statements.
1. When a country progresses further the manufacturing sector takes a back seat and give a way to service sector in terms of both output and employment.
2. When a country progresses further manufacturing sector become increasingly services sector.
Which of the statements) given above is/are correct?
(a) Only 1
(b) Only 2
(c) Both 1 and 2
(d) Neither 1 nor 2
11. Consider the following statements regarding IT sector of India.
1. India has achieved brand identity in this sector.
2. Besides it’s impact on growth, it is also a provider of skill employment both in India and abroad.
Which of the statements) given above is/are correct?
(a) Only 1
(b) Only 2
(c) Both 1 and 2
d) Neither 1 nor 2
12. Consider the following statements.
1. New Space India Limited is a public sector undertaking of Government of India.
2. IN-SPACe is established as a Single Window Nodal Agency.
Which of the statements) given above is/are correct?
(a) Only 1
(b) Only 2
(c) Both 1 and 2
(d) Neither 1 nor 2
13. What is Swadeshi Darshan Scheme?
(a) It is a Central Financial Assistance to State Governments, Union Territory Administrations for the infrastructure development of circuits.
b) it is concerned state developmental scheme.
(c) It is Central Government initiative to sightseeing in India.
(d) None of the above
14. Consider the following statements regarding key features of Drone Rules 2021.
1. Type of fees reduced from 72 to 4.
2. Prior security clearance removed.
Which of the statements) given above is/are correct?
(a) Only 1
(b) Only 2
(c) Both 1 and 2
(d) Neither 1 nor 2
15. The Union Ministry of Textiles has launched Power Tex India. It’s main objectives are
(a) to boost common infrastructure and modernisation of the powerloom sector in the country.
(b) to new research and development in powerloom textiles.
(c) to search new markets, branding subsidies and welfare schemes for the workers.
(d) All of the above
Know Right Answer
1 (d)
2 (b)
3 (d)
4 (b)
5 (d)
6 (b)
7 ((d)
8 (d)
9 (d)
10 (b)
11 ((c)
12 (c)
13 (c)
14 (c)
15 (c)
Frequently Asked Questions (FAQs)
Q1: What is the significance of the service sector in the Indian economy according to UPSC NCERT notes?
A1: The service sector plays a crucial role in the Indian economy as it contributes significantly to the country’s GDP and employment. According to UPSC NCERT notes, the service sector encompasses a wide range of activities such as IT, telecommunications, banking, healthcare, education, and more. Its growth has led to economic diversification, increased employment opportunities, and improved standards of living.
Q2: How does the UPSC NCERT emphasize the role of Information Technology (IT) in the Indian service sector?
A2: According to UPSC NCERT notes, Information Technology (IT) is highlighted as a key driver of growth in the Indian service sector. The notes discuss how the IT industry has transformed India into a global outsourcing hub, attracting foreign investment and creating employment opportunities. The sector’s success is attributed to factors like a skilled workforce, cost-effectiveness, and favorable government policies.
Q3: What challenges does the UPSC NCERT identify for the service sector in India, as mentioned about the Indian Economy?
A3: UPSC NCERT notes outline several challenges faced by the service sector in India. These challenges include issues related to infrastructure, skill gaps, and regulatory constraints. The notes elaborate on how addressing these challenges is crucial for sustaining the growth of the service sector, ensuring global competitiveness, and realizing the full potential of the Indian economy.
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