Practice Question on Service sector (Indian economy) for UPSC, APPSC, TGPSC and other state PSC exams

RuPay card was launched by NPCI in 2012 as India’s indigenous card payment network. RuPay credit cards on UPI have seen significant growth with transactions doubling in first seven months of FY25. RuPay is accepted at ATMs POS terminals and e-commerce platforms.

Government e-Marketplace (GeM) was launched in August 2016 to facilitate online procurement of goods and services by government departments. It was created in a record time of five months. GeM ensures transparency efficiency and cost savings in government procurement.

Average monthly data consumption per wireless subscriber increased from 61.66 MB in March 2014 to 21.30 GB in June 2024 – an increase of 353 times. Average revenue per GB wireless data reduced by over 96% from Rs 268.97 to Rs 8.31 in the same period.

UPI seamlessly facilitates live transactions in 7 countries including UAE Singapore Bhutan Nepal Sri Lanka France and Mauritius. NPCI has been working on expanding UPI’s global footprint. Prime Minister Modi has pitched for UPI’s expansion within BRICS grouping.

India’s services exports reached approximately USD 387 billion in FY 2024-25 more than doubling from USD 158 billion in FY 2013-14. Services exports have shown remarkable growth driven by IT/software business services and professional services.

The services sector provides employment to approximately 30% of India’s workforce. Agriculture employs about 46% and industry about 24%. Though services contribute 55% to GVA its employment share is lower indicating higher productivity compared to agriculture.

India is among the top 5 largest e-commerce markets globally. E-commerce sector has grown rapidly driven by digital payments increased internet penetration and smartphone usage. Major players include Flipkart Amazon India Reliance JioMart and Meesho.

India ranks 7th globally in services exports with a 4.3% share in global services exports. In Telecommunications Computer and Information Services India ranks 2nd largest exporter in the world with 10.2% share as per UNCTAD. Services exports grew 12.8% in April-November FY25.

ONDC has processed a cumulative of 154.4 million+ orders till December 2024. In December 2024 alone ONDC processed 15.4 million+ orders with average daily transactions reaching approximately 490000+. ONDC aims to democratize e-commerce in India.

India’s Current Account Deficit remained relatively contained at 1.2% of GDP in Q2 FY25. This was due to robust services trade surplus and record remittances from abroad. Services exports and remittances are key factors in managing India’s external sector balance.

The services sector’s contribution to India’s GVA has increased from 50.6% in FY14 to about 55% in FY25. It is the largest sector of Indian economy. The sector employs about 30% of the workforce and has been termed ‘Old War Horse’ in Economic Survey 2024-25.

Air passengers handled at Indian airports increased by 15% YoY in FY24. Air cargo handled increased by 7% to 33.7 lakh tonnes. India’s aviation sector has grown substantially becoming the third largest domestic aviation market globally after USA and China.

UPI was launched in April 2016 by the National Payments Corporation of India (NPCI). It enables instant real-time interbank transactions via mobile devices. UPI has become the world’s largest retail fast-payment system by transaction volume as recognized by IMF in 2025.

Digital India programme was launched on 1st July 2015 by Prime Minister Narendra Modi. It aims to transform India into a digitally empowered society and knowledge economy. Key pillars include digital infrastructure digital services and digital literacy.

BHASHINI (BHASHa INterface for India) was launched in 2022 under the National Language Technology Mission. It aims to transcend language barriers and ensure every citizen can access digital services in their own language. It uses voice as medium and has 50+ stakeholders onboarded.

UPI’s share in total digital payments in India grew to 83% in 2024 up from 34% in 2019. India recorded 208.5 billion digital payment transactions in 2024. The share of other payment methods like NEFT RTGS IMPS and cards declined from 66% to 17%.

The Indian IT/ITeS industry has estimated revenues of USD 254 billion in FY24 marking 3.8% YoY growth (excluding e-commerce). Tech exports reached nearly USD 200 billion reflecting 3.3% growth. Domestic market expanded by 5.9% crossing USD 54 billion in FY24.

India’s services export growth surged to 12.8% during April-November FY25 up from 5.7% in FY24. Services exports reached USD 341.1 billion in FY24. Computer services and business services account for about 70% of India’s services exports.

National Logistics Policy was launched on 17th September 2022. It aims to reduce logistics cost from about 14% of GDP to global benchmark of 8% by 2030. It targets improving Logistics Performance Index ranking to top 25 by 2030 and creating data-driven logistics ecosystem.

The gross GST collection reached Rs 20.18 lakh crore in FY24 marking 11.7% increase from the previous year. This underscores robust domestic trading activity. GST introduced in July 2017 unified indirect taxes and improved compliance in services sector.

India’s Global Capability Centres have grown from approximately 1430 in FY19 to over 1700 in FY24. GCCs employ nearly 1.9 million professionals as of FY24. India is the preferred destination for GCCs by multinational corporations boosting software and business services exports.

India has seen the fastest 5G rollout in the world with 462084 5G BTS deployed across 779 districts as of December 2024. The median mobile broadband speed increased from 1.30 Mbps in March 2014 to 95.67 Mbps in December 2024. Over 6.15 lakh villages have 4G connectivity.

Insurance Regulatory and Development Authority of India (IRDAI) is the insurance regulator established under IRDA Act 1999. It was constituted in 2000. IRDAI regulates and promotes the insurance and reinsurance industry. It is headquartered in Hyderabad.

The services sector grew at 7.1% in first half of FY25 with notable growth in Q1 and Q2. Services sector continues to perform well and is estimated to grow 7.2% in full FY25. All sub-sectors have performed well with IT finance and hospitality leading growth.

Servicification refers to the increasing utilization of services in manufacturing production and post-production value addition. Services like logistics design R&D IT integration and after-sales contribute to manufacturing value. This trend is growing in India enhancing productivity.

FDI equity inflows in services sector stood at USD 5.7 billion during April-September FY25 out of total FDI equity inflows of USD 29.8 billion. Services sector continues to attract significant FDI. Liberalization in insurance education technology and professional services is enhancing attractiveness.

Ayushman Bharat Pradhan Mantri Jan Arogya Yojana (PM-JAY) launched in September 2018 provides health coverage of Rs 5 lakh per family per year for secondary and tertiary hospitalization. It is the world’s largest health insurance scheme covering about 55 crore beneficiaries.

India’s rank in World Bank’s Logistics Performance Index improved by six places from 44th in 2018 to 38th in 2023 out of 139 countries. This improvement is due to initiatives like PM Gati Shakti National Logistics Policy and infrastructure development.

Services exports accounted for 44% of India’s total exports in FY24. Post-pandemic services exports have maintained steady momentum. India ranked fifth globally in services exports after EU USA UK and China. Services trade surplus helps cushion current account deficit.

Computer services and business services together account for about 70% of India’s services exports. IT/ITeS sector is a major contributor to services exports. India’s share in digitally delivered services exports globally increased to 6% in 2023 from 4.4% in 2019.

India ranks 2nd largest exporter in the world in Telecommunications Computer and Information Services as per UNCTAD with 10.2% share of global exports in this category. This underscores India’s global competitiveness in IT and digital services sector.

BSE stock market capitalization to GDP ratio stood at 136% at end of December 2024 far higher than other Emerging Market Economies like China (65%) and Brazil (37%). India has become one of the most valuable stock markets globally reflecting investor confidence.

NPCI stands for National Payments Corporation of India. It was established in 2008 by RBI and Indian Banks’ Association under Payment and Settlement Systems Act 2007. NPCI operates retail payment systems including UPI IMPS NACH RuPay BBPS AePS and FASTag.