The services industry is one of the largest and fastest-growing sectors in the global market. Its contribution to the Indian economy is particularly significant, with regard to employment potential and impact on national income. This sector covers a wide range of activities, such as transportation, communication, tourism, trading, finances, real estate and health, among others. India's service sector contributes to about 60 per cent of the country's Gross Domestic Product (GDP), 35 per cent of employment, a quarter of the total trade, and over half of the foreign investment inflows. The service industry provides massive business prospects to investors. Without the sector's capacity to generate revenue, it would be difficult for the Indian economy to acquire the healthy place it currently enjoys on the global platform.
The Indian tourism and hospitality industry has emerged as one of the key industries driving growth of the service sector in India. Tourism in India has registered significant growth in the recent years and the country has tremendous potential to become a major global tourist destination. Tourism in India is the largest service industry, with a contribution of 6.23% to the national GDP and 8.78% of the total employment in India. In 2010, total Foreign Tourist Arrivals (FTA) in India were 5.78 million and India generated about 200 billion US dollars in 2008 and that is expected to increase to US$375.5 billion by 2018 at a 9.4% annual growth rate. Indian tourism industry is thriving due to an increase in foreign tourist arrivals and greater number of Indians travelling to domestic destinations than before. In the past few years the real growth has come from within the domestic sector as around 30 million Indians travel within the country in a year. Strong growth in per capita income, rising young population coupled with changing lifestyles are leading to greater expenditure on leisure service. It is the largest service industry globally in terms of gross revenue as well as foreign exchange earnings. Tourism can play an important and effective role in achieving the growth with equity objectives which we have set for ourselves.
The present paper analyses the trends in development of service sector and contribution of tourism in the context in India context. By analyzing the trends, the study looks into the future prospects for service sector with a focus on tourism industry.
Service Sector GDP, Employment, Growth Rate
