Draft Report of the High Level Group on Services Sector
Table 1a: Share of Different Sub-sectors within Services
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- Bu səhifədəki naviqasiya:
- Employment in Services Sector
- Growing Exports of Commercial Services from India
| Table 1a: Share of Different Sub-sectors within Services
(at 1999-2000 prices)
Table 1b: Growth Rate within the Services Sector
Source: National Accounts Statistics Employment in Services SectorAt present services account for about 26 per cent of total organized sector employment in the country while contributing a little over 55 per cent to the national GDP. A sectoral disaggregation of the employed workforce shows that the contribution to employment of services (excluding construction) rose from 22.8 to 23.4 per cent, while the workforce increased from 397.0 to 457.8 million between 1999-2000 and 2004-05 (details in Table 1c below). Out of the increase in workforce by 60.8 million, the incremental share of services was 16.8 million. However, despite the low overall elasticity of employment in the country (at just 0.48) and not only in the services sector, the latest NSSO data shows that employment elasticity is reasonably high (and increasing) in certain services categories, with financing, insurance, real estate and business services registering an elasticity of employment of 0.94 followed by construction sector employment elasticity at 0.88. Table 1c: Employment Statistics (disaggregated)
Source: C Rangarajan et al (2007), ‘Revisiting Employment and Growth’, ICRA Bulletin - Money & Finance Vol 3(2); data sourced from NSSO 2004-05, based on 61st Round Survey. Nonetheless, drawing ready inferences from the above official data may be misleading, as it is believed that a significant portion of the Indian population presently accounted for under the agriculture/rural employment is working in the unorganized services sectors, both in the rural and the urban areas, in particular in the Trade, hotels and transport business services; and the Community, social and personal services sectors (though the employment share of this last sector is declining in the formal sector, as indicated in Table 1c above).2 The other new source of employment has been the Business Processing Outsourcing (BPO) services. Figure 2 below highlights the rapid employment growth in India’s IT and ITeS/BPO sectors. According to NASSCOM estimates, the number of total knowledge professionals employed in the Indian IT-BPO sector increased from 230 thousand in 1998 to nearly 2 million in 2007-08. Decomposition of the employees in the domestic as opposed to export sectors is shown in Table 1d.
Source: NASSCOM 2007 Table 1d: Knowledge Professionals Employed in the Indian IT-BPO Sector (in thousands)
Growing Exports of Commercial Services from IndiaIndia has emerged as one of the leading exporters of commercial services in the world. In recent years, India's merchandise exports to the rest of the world crossed the 1 per cent mark (global ranking 28th as exporter), growing at an average 25 per cent over the last 3 years, but the net merchandise trade balance is negative. But India's invisible (net) inflows continue to compensate the growing trade deficit to a large extent; in 2005-06, India’s commercial services exports constituted around 37 per cent of the country’s global exports (goods and services). Indian export of commercial services has been among the fastest growing globally in the past 15 years, and grew at over 17 per cent per annum in the 1990s as compared to the world average of 5.6 per cent. Between 2001 and 2006, on average, India’s exports of commercial services grew at over 30 per cent against the world average of 10 per cent; in 2005-06, India’s services exports grew by 35 per cent. With the advancement in technology and increase in internationalisation of product processes, in 2006 global trade in services is estimated in WTO International Trade Statistics at US $ 2755 billion, comprising transportation services (US $ 630 billion or 22.87 per cent ), travel services (US $ 745 billion or 27.04 per cent) and Other Commercial Services (US $1380 billion or 50.09 per cent). In 2006, India exported US $72.8 billion of commercial services, equivalent to 2.7 per cent of global services trade, having grown at 34 per cent over last year’s exports (see Table 1e below for details). In 2005, with a share of 2.2 per cent and US $54.4 billion of world exports in commercial services, India had already moved up to the 10th position in the world from 16th in 2004.3 Table 1e below highlights India’s performance in exports of commercial services in the present decade. Data showing detailed break up of exports of commercial services are available for 2005. Against world exports of US $ 576 billion in transportation services4 India’s share was US $ 5.76 billion. In travel services5 India’s export in that year was US $ 6.55 billion against the world exports of US $ 685 billion. In other commercial services, India’s export aggregated US $ 42.06 billion against world exports US $ 1197.2 billion, constituting more than three per cent against less than one per cent in the other two categories. In 2005 the main contribution in India’s export performance in other commercial services was of other business services6 (US $ 20.5 billion out of world exports of US $595 billion) and computer and information services7 (US $ 16 billion out of world exports of US $105 billion). A significant feature of India’s services sector is India’s emergence as a world leader in IT&BPO services. India accounted for 65 per cent of the global market in offshore IT services and 46 per cent of the global BPO market in 2004-05. Table 1e: Exports of Commercial Services
Source: Calculations based on data from International Trade Statistics, WTO, several issues. Statistical analyses indicate that India continues to exhibit a strong revealed comparative advantage8 (RCA) in services. Figure 3: India’s RCA vs Share in Global Commercial Service Exports Source: WTO International Trade and Tariff Database, Statistical Program – Time Series, accessed January 2008 (for data on country and world exports) Computation of RCA for the three categories of commercial services shows that while in transportation services and travel services, India’s competitive position has been on the decline, it has been sharply rising in respect of other commercial services, mainly on account of computer services and other business services, in which areas we have already seen that India has substantial exports.
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