ECONOMICS PRESENTATION

ON
SERVICE SECTOR IN INDIA

PRESENTED BY :
Rashika Subramanian
Deeksha Pathak B.COM
Shruti Bhargava MANAGEMENT
Mansi Sharma HONOURS
Sonia Agarwal
 Service Sector

Contribution to Indian economy

A type of economic activity that is intangible , is
not stored and does not result in ownership. A
service is consumed at a point of sale . Services
are one of two key components of economy ,
the other being goods.
CONTRIBUTION OF VARIOUS SECTORS
IN GDP
 SERVICE SECTOR IN INDIA
 59% of contribution in GDP in 2013-2014
 Contributing a quarter of total employment (25%)
 Contribution to India’s service trade
 Accounting for high share in FDI
 Contribution towards growth of IT and ITeS.
 SERVICES CLASSIFICATION IN
INDIAN ECONMY
Financial, real
estate, and • Contributed 20.5% to GDP
professional services

Community ,social • Contributed 12.6% to

and personal
services GDP

Trade, repair ,hotel • Contributed 12.5% to

and restaurant
services GDP
Infrastructure refers to the
INFRASTRUCTURE
fundamental facilities and
systems serving a country, city or
area, including the services and
facilities necessary for its
economy to function.
 IMPORTANCE OF INFRASTRUCTURE
 Facilitates functioning of economy
 Facilitates smooth flow
 Raising mobility of manpower
 Promotes development
 Reducing poverty
 Rational use of financial resources
 Promotes marketing and trade
 Enhance social welfare
 GROWTH OF INFRASTRUCTURE

In Indian planning high priority was

given to the development of
infrastructure from the very beginning.
In the First Six Plans, about 55 to 61
percent of the total plan outlay was
devoted to the development of
infrastructure.
 ALLOCATION OF OUTLAY OF
INFRASTRUCTURE
HEADS 6 PLAN(IN PERCENT)
th th
7 PLAN th
8 PLAN
(ACTUAL) (ALLOCATION) (ALLOCATION)
IRRIGATION 9.4 7.5
10.0
ENERGY 28.3 30.5 26.6

TRANSPORT AND 16.2 16.3 18.7

COMMUNICATION
SCIENCE AND 0.7 1.4 2.1
TECHNOLOGY
EDUCATION AND 5.8 5.4 6.2
HEALTH
TOTAL 61.0 63.0 61.1
 RECENT STRATEGY ADOPTED BY
THE GOVERNMENT

Guidelines for private

investments
Approval of clear and
transparent guidelines
•ESTABLISHED IN: 1 APRIL 1935
(Under the Reserve bank of India in 1934)
NATIONALIZED IN : 1949
(After independence)
CONTROLLED BY:CENTRAL BOARD OF DIRECTORS
CENTRAL BOARD OF
DIRECTORS

4 DEPUTY 15
GOVERNER
GOVERNER DIRECTORS
HEADQUARTERS: MUMBAI MAHARASTRA
EMBLEM: TIGER AND PALM
TREE
 FUNCTIONS OF RESERVE
• UnderOF
BANK section
INDIA22 of the
reserve bank of India act,
BANK the bank has the sole right
OF to issue bank notes of all
ISSUE denominations.
• RBI is regulates and supervise
commercial bank’s proper
BANKER functioning. As the banker to
S’ BANK banks, the central bank
functions in three capacities:
 BANKER’S BANK
CUSTODIAN OF CASH RESERVES:
• Commercial banks are required to keep a
certain proportion of their deposits with
RBI.
LENDER OF THE LAST RESORT
• When commercial banks fail to meet their
financial requirements from other sources, they
approach the central bank to give loans and
advances
CLEARING as the lender of last resort.
HOUSE
• All commercial banks have their accounts with
RBI so RBI can easily settle claims of various
commercial accounts against each other by
CONTROL • It has the power to influence the
LER OF volume of credit created by banks
CREDIT in India.
• The reserve bank has the responsibility
CUSTODIA to maintain the official rate of
N OF exchange. According to the reserve
FOREIGN bank of India act of 1934,the bank was
EXCHANG required to buy and sell at fixed rates
E RESERVE any amount of sterling in lots of not
less then Rs 10,000.
BANKER
TO THE • It acts as government banker,
GOVERNM agents and adviser
ENT
 MONETARY POLICY OF THE
RESERVE BANK OF INDIA
The monetary policy since 1952
emphasised the twin aim aims of
the economic policy of the
government:
a. speed in economic
development in the country
to raise national income
and standard of living and
b. To control and reduce
inflationary pressure in
the economy.
 CREDIT CONTROL

QUANTITATIVE QUALITATIVE
METHODS METHODS
LEGAL
REPO BANK
RATE
RESERVE MARGIN

RATE
REQUIREMENT
REQUIREMEN
MORAL
T
CASH RESERVE SUASION
RATIO
SELECTIVE CREDIT
STATUTORY CONTROL
RESERVE
RATIO
 • It is the rate at which Reserve
BANK bank lends money to domestic
RATE • .banks
•• CURRENT BANK
It is the rate RATE:7.75%
at which reserve
bank lends money to
REPO RATE commercial banks for a short
• period
It refersoftotime
the minimum
CASH percentage
• CURRENT REPOof RATE:6.75%
net demand and
RESERVE time liabilities , to be kept by
REQUIREME commercial bank with reserve
bank of India.
NTS •• It refers to minimum
CURRENT CRR:4.00%
STATUTORY percentage of net and time
liabilities which commercial
LIQUIDITY banks are required to maintain
RATIO themselves.
 QUALITATIVE METHODS
MARGIN • MARGIN REQUIREMENT IS THE
DIFFERENCE BETWEEN THE
REQUIREM AMOUNT OF LOAN AND MARKEY
ENT VALUE OF SECURITY.
• COMBINATION OF PERSUASION
MORAL AND PRESSURE THAT CENTRAL
SUASION BANK APPLIES ON OTHER BANKS.
SELECTIV
• UNDER THIS RBI GIVES DIRECTION
E CREDIT TO OTHER BANKS TO GIVE OR NOT
CONTRO TO GIVE CREDIT FOR CERTAIN
PURPOSES TO PARTICULAR SECTOR
 Financial Institutions

Development State Level Investment Specialized

Banks Institution Institution Financial Inst.

~IDBI ~SFCs ~ UTI ~EXIM Bank

~ICICI ~SIDC ~ LIC ~NABARD
~SIDBI ~ GIC ~NHB
~IFCI
INDUSTRIAL FINANCE CORPORATION OF
INDIA (IFCI)

The government
of India
set up (IFCI)
in July1948
under a
special Act.
First Development
Financial Inst.
In India after
Independence.
 Financial Assistance By IFCI
(Rs. In crores)

Year 1980-81 2004-05

Loans 210 1390

Sanctioned
Disbursement 110 280
 INDUSTRIAL CREDIT AND INVESTMENT
CORPORATION OF INDIA (ICICI)

• Purpose of developing small and medium industries

in the private sector.

• It was registered in January 1955 under The Indian

Companies Act .

• In March 2002 the institution was merged with its

subsidiary ICICI Bank and the first universal bank in
India was created.
 (Rs. In crores )

Years 1980-81 2001-02

Loans 310 36,230
sanctioned
Disbursements 180 25,830
 INDUSTRIAL DEVELOPMENT BANK OF INDIA
(IDBI)
• Established in 1947 by RBI.
• It was established to provide credit for major
financial facilities to assist with the industrial
development bank of India.
 SMALL INDUSTRIES DEVELOPMENT BANK OF
INDIA (SIDBI)
• It is an independent financial institution aimed to
aid the growth and development of micro, small
and medium-scale enterprises (MSME) in India.

• Set up on April 2, 1990 through an act of

parliament, it was incorporated initially as a
wholly owned subsidiary of IDBI.

• Currently the ownership is held by 33

Government of India owned / controlled
institutions.
 Functions
• Refinances loans and advances to small industrial
units
• Discounts and rediscounts bills from sale of
machine.
• Provides services like leasing , factoring etc to
small scale sector
(Rs. In crores )

YEARS 1990-01 2004-05

Loans 2410 9180

sanctioned
Disbursed 1840 6190
 STATE LEVEL INSTITUTIONS
State Financial Corporation State Industrial Development
Corporations

• Set up under State • 1st (SIDC) was established in

Financial Corporations Act Bihar in 1960
in 1951 • 29 SIDCs in India.
• Development of small and • work at the grass roots level,
medium industries for providing development in the
financing and balanced backward and less frequent
regional growth parts of India.
Life Insurance Corporation (India) (LIC) is an Indian state-
owned insurance group and investment company
headquartered in Mumbai.

The Life Insurance Corporation of India was founded in 1956

when the Parliament of India passed the Life Insurance of
India Act.

Spread Life Insurance widely and in particular to the rural areas

and to the Socially backward classes.
Maximize mobilization of people’ savings by making
insurance-linked savings Adequately attractive..
Conduct business with utmost economy and with the full
realization that moneys belong to the policyholders.
Unit Trust of India
Type Public

Industry Mutual fund

Founded 1964

Headquarters Mumbai, Maharashtra, India

Key people Leo Puri Managing Director

Slogan Haq, Ek behtar Zindagi ka

Unit Trust of India is a financial organization in India,
which was created by the UTI Act passed by
the Parliament of India on December 30, 1963

I. To encourage savings of lower and middle-class people.

II. To sell units to investors in different parts of the

country.

III. To covert the small savings into industrial finance.

IV. To provide liquidity to units
Type Public
Industry Banking

CEO:Sriram Kalyanaraman

Founded 9 July 1988

Headquarters New Delhi, India

Products Loans
 National Housing Bank (NHB), a wholly owned
subsidiary of Reserve Bank of India (RBI), was
set up on 9 July 1988 under the National
Housing Bank Act, 1987. NHB is an apex
financial institution for housing.

•To promote a sound, healthy, viable and cost effective

housing finance system.
• To make housing credit more affordable.
•To augment resources for the sector and channelise
them for housing.
•To promote a network of dedicated housing finance
institutions
National Bank for Agricultural and
Rural Development
 National Bank for Agriculture and Rural Development (NABARD)

An apex development bank in India, having headquarters

in Mumbai (Maharashtra) and other branches are all over the
country.

It was established on 12 July 1982 by a special Act of parliament

and its main focus was on upliftment of rural India by increasing
the credit flow for elevation of agriculture & rural non farm sector
completed its 34 years on 1 Jan 2016.

• Strong and efficient credit delivery system

• Responsible for regulating and supervising the functions of Co-operative

banks and RRBs.

• To improve the health of Co-operative banks and Regional Rural Banks.

Export-Import Bank of India

Type Public
Industry Banking
Financial services
Export Credit Agency
Founded 1982
[1]
Headquarters Mumbai, India
Key people Yaduvendra
Mathur,Chairman and
Managing Director
Products Corporate Finance
Line of credit
Export Credits
Film financing
Export Services
SME & Agro Finance
Buyer's Credit NEIA
The Export-Import Bank of India, also known as Exim Bank of
India, is the leading export finance institution in the country.

The bank was set up in the year 1982 under the Export-
Import Bank of India Act 1981.

•The primary objective of the Export-Import Bank of

India is to provide financial assistance to importers
and exporters and function as the top financial
institution.
Source of finance, promoter, coordinator and consultation to
India's Foreign Trade.

The bank is the coordinator of the Working Group Mechanism

for the clearance of projects, service exports and deferred
payment exports.

This working group gives clearance to contracts and operates

as a single window mechanism