Growth of Service Sector Video Lecture | Business Economics for CA Foundation

oh it has grown it has grown
tremendously in all the sectors as you
know in IIT enable services BPO gr since
we are a labor-intensive economy where
the availability of labor is there so it
is in all these services are 19 able
services and dpo Mia in providing
services similarly a rich culture a
country with a rich culture and
diversity tourism is also a very
important industry where it is growing
tremendously Financial Services has also
improved tremendously from the era of
moneylenders to so many in financial
Institute's coming up they have also
improved tremendously insurance sector
real estate sector entertainment
industry has become so big
similarly education sector has also
increased tremendously with so many
private Institute's coming up so overall
we can see that the service sector has
grown tremendously over the years
as you can see the agriculture the
percentage of GDP earlier it was the
agricultural sector which was leading
with 53 percent of GDP coming from
agriculture and it has come down to 14
whereas service sector has increased
from 30 percent contribution to GDP to
60 percent it has nearly doubled and at
present 14 percent income GDP is a share
of agriculture 26% is from industry and
60 percent of share in GDP is from the
service sector so it is the cup it has
grown and it is a very important sector
for Indian economy at the moment now
factors that have been responsible for
growth in service sector is income
elasticity of demand for services is
greater than one what do we mean by
income elasticity of demand income
elasticity of demand means that the
percentage change in the demand of a
good in proportion to the percentage
change in your income that is your
income increases by 10 percent your
proportionate change in the demand
service increases by 20% so that is very
greater that is greater than one for
services because nowadays as income of
the people increases they like to spend
more so on communication on
entertainment or better education so
this is one reason why service sector
has grown so tremendously secondly
secondly because of the services that we
provide outsourcing of services as
possible because of the better
technology and it is being possible to
provide your services out also and
foreign countries also so that is also
one of the reason why the service sector
has grown and information technology
revolution because of the improvement in
technology you can offer your services
abroad as well that is why the service
sector has grown and economic reforms
have been introduced that have also
helped a lot in improving your or growth
of your service sector now it is the
environment there is more liberalized
eco policies there is globalization
there is a bigger platform where you can
attract tourists also it has become
easier so for all these things it has
grown