India has transformed from being an agriculture-based economy to being a knowledge-based one in the recent decade. The services sector has played a vital role to bring in this change. Ranging from complicated services such as information technology (IT) and healthcare to as simple as educational services, the country has mapped growth in every segment of the services industry. Covering wide range of activities like trading, transportation, communication, financial, real estate and business services, Indian services sector contributes more than 50 per cent to the national gross domestic product (GDP).
Education and healthcare services are two of the largest and most challenging sectors tha have the onus to drive the country's progress. Apart from them, IT, IT enabled Services (ITeS), financial services and retail form key pillars of the services landscape.
While India's life insurance service segment may see a quantum jump of 13-14 per cent by 2015 and contribute 10 per cent to the total global premium, according to a report by McKinsey, Kotak Institutional Equities predict that the country's huge consumption market would grow from current Rs 43 trillion (US$ 773.04 billion) to Rs 110 trillion (US$ 2 trillion) by 2025.
With global BFSI (banking, financial services, insurance) clients accounting for over 40 per cent of Indian IT vendors' revenues, the industry is poised to go beyond US$ 100 billion mark in 2012. Moreover, industry body Nasscom predicts that the ITeS industry will earn around US$ 225 billion by 2020, wherein 80 per cent of the growth would come from the presently untapped sectors and regions.
Similarly, IDC Manufacturing Insight predicts that IT spend by Indian manufacturers would grow at an average rate of 14.5 per cent between 2012 and 2016 to reach US$ 8.78 billion, which would be the double of manufacturing IT expenditure inculcated in 2011.
Service providers across various segments remained optimistic regarding activities over the coming year on the back of new orders and positive employment outlook. This was reflected in HSBC's purchasing managers index (PMI) which stood at 54.2 for the month of July 2012.