The globalization was welcomed in Indian economy with many ambitious and high end promises in 1991.The impact which it aimed to create was wiping regional imbalance and suddenly pushing the economy on a speedy springboard of prosperity and growth year after year.
The Indian service sector was almost ready for a transformation into a professional and customer oriented for customer.It was estimated that the employment would multiply,incomes may grow and also we would move to be a developed India.
Quite against the expectations the actual picture doesnot have any pleasant colours,the employment generation have been at a fluctuating rate,the incomes remained ore or less shifted fragments of income creating the total income of the sector almost at the same level.With respect to the GDP contribution by service sector even though it has increased ore than 5 times in comparision with 1991 but growth has been more pleasing for an Economist’s analysis of statistics but certainly not matching the growth aspirations of an average Indian.
EFFECTS Of GLOBALISATION ON INDIAN SERVICES SECTOR
OPPORTUNITIES AND CHALLEGES
Introduction:Globalisation in its true sense means to upscale the economic activity of any country with the overall growth and development taking place across the countries.It was the same promise which lured Indian economy and its people to provide a red carpet welcome to this concept of mingling with the world’s traditions and adopting a culture of modernization with an Indian touch.
Indian Economic Scenario PreGlobalisation:An overview about the Indian economic position before globalization shows that somewhere the public sector managed and owned by Indian govt managed to grow and provide a secured and sustainable growth to the various segments and service sector.
In simple terms the servicer sector was more profitable and employment oriented before the globalization factor as compared to the after implementation.
In service sector of any economy developed or the developing the main crux lies on as to whether there is increase in the incomes and better economic facilities to the common man due to the advantage and faster reach of the service sector.
It is pertinent to note that among the service sector defence was given the highest expenditure allocation for many years till 1991,this not only drained the impact which could have been created by the service sector and also help in terms of creating the right change and the impetus through which there can be support as well as right direction which was much awaited in the service sector.
If one compares the education scenario before 1991 even at a slow pace the education was affordable and easily accessable before the open economy system as compared to the scenario when Indian was flooded with private universities offering high value and highly sophisticated courses.
The same position applies to the health sector even with bare minimum facilities prior to the globalization the average Indian could at least afford the 3 to 5 times the medical expenses 3- 5 times in a yea now inspite of mediclaim the same has decreased to about 2 times affordable capacity after the globalization.
Indian Economic scenario after Globalisation: Post globalization the entry of the private players in the various service segments not only provided a new definition to the service sector but also added one ore dimension to the service which was ‘Affordability’. Yes we all are connected by wireless and cordless telecom service but does the same contribute towards increasing the income when every one else also has the same facility.The time has finally arrived when we as ourselves a very basic question that is globalization mere increasing the expenditure on the services provided by the service sector or is it improving the percolation of the growth to the as and the most vulnerable strata of society.
We do claim with pride that Retail sector got glorified after service industry.In its true sense the retailers have become more prone to squeezing the margins after entry of foreign retailers by FDI mode.It is expected that is foreign giants enter the market about 42% of the unorganized retail would be on verge of extinction du to lack of service and more so the lack of the right marketing strategies.
Our Opportunities with Globalisation:One of the most prominent dividends by the globalization is developing prompt and effective range of services accessible just at the click of mouse. It is nothing but digitalization of services which has been of the most rewarding success via globalization it not only has helped to improve the spread of services but also made it possible to create the groundlevel framework to create long term working models.
We created new segments in services like lifesciences,micro finance,commodits,derivatives etc for average Indian who now can endeavour to fit in his lower strata of income with the entry level base of services sector.
Challenges in the service sector:The service sector in India is subject to a series of hurdles ahead.The sector has a common dilemma of increasing costs and decreasing revenues in the times to come.Not only there is likely to be problem of lay offs in sector especially the very vulnerable BPO sector but also in plum segments like Banking and Insurance there has been a single digit growth in private secor.The latest news being Apollo Insurance and Future Generalle insurance have already closed their shops and Bharti AXA reporting a all time low in sales volumes in past three years.With these
conditions in mind it is certainly not a promising position for Indian services be it hospitality segments like seven hills not able to pay its staff or increasing NPA’s of Housing loans in India the only factor which would and sustain the growth of Indian services in the future shall be the customer base and the affordability so that fortune at the below the line segment may drive and accelerate the services growth in India.