Question 1 · 10 marks · 191 words written
Opening · a figure
According to NSO (MoSPI), Service sector contributes about 53%-55% to India's GDP composition & employs about 30% of the workforce.
Body · points
Implications for Significance
- Largest sector to contribute to India's GDP, making India a service hub of the world.
- Growth of IT industry which service globally with companies like TCS, INFOSYS etc.
- Need for skilled & highly skilled labour with skills like AI & Machine Learning, Data Analytics etc.
- High ROI sector as many clients are situated abroad - hence increased forex.
- High job providing and high paying sector.
Vulnerability to Global Shocks
- Recent TCS layoff of 12000 employees show India's service sector's vulnerability to global shocks.
- Global recession will mean a slowdown in India's service sector.
- Post covid slow demand leading to stagnation and slow growth in service sector.
- Competition by South East Asian nations like Malaysia & Phillipines for BPO & call centers due to cheap workforce.
Close · a way forward
India's service sector provides rigidity to economy but it must transform to keep up with new advancements like AI & ML to become not only service providers but technology developers as well.