Role of Service Sector in Indian Economy

Adam Smith, the father of Modern Economics has stated 'services are unproductive'. But time has changed and now services are playing major role in the economy. Services sector has emerged as the fastest growing sector of the economy. Services sector is called the tertiary sector. It has become wider. Services sector includes: trade, hotels, restaurants, transport, storage, communication, finance, insurance, real estate and business services. Service sector has made structural changes in the economy. The new economic policy of 1991 was the turning point of the Indian economy. A lot of changes in the economy have been occurring due to the adoption of 'The New Economic Policy' especially, in the services sector. The current situation in India is that the growth rate of services has overtaken both agriculture and industry, and is now more than 45 per cent of the GDP.