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Communication sector to become largest contributor to India's GDP
By siliconindia
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Bangalore: The communication sector is predicted to emerge as the single largest sector of India's economy with a 15 percent share of GDP by 2014-15. In India's transformation from an agrarian to a services economy, communication is recognized as the fastest growing sector, growing by 25.7 percent during 2001-08.
Nokia India shared the findings of a study, "Economic Impact of the Communication Sector in India" carried out by Dr. Rajesh Shukla (Senior Fellow) and K.A. Siddiqui (Associate Fellow) of the National Council of Applied Economic Research (NCAER). The study highlights the important role of the communication sector (includes, postal, telephone, telegraph services rendered by postal and telegraph department and overseas communications services) in driving growth across rural and urban India.
The communication sector will be one of the major drivers of the Indian economy in the coming five years. Its ranking in terms of contribution to total GDP has moved up from 17 in 1980-81 to 8 in 2007-08 and is expected to surpass all other sectors by 2014-15 (assuming that all other sectors grow at the average growth rates observed during 2001-08).
At the same time, the communication sector's share of total GDP has increased from just 0.7 percent in the 1980s and one percent in the 1990s to 3.6 percent during 2001-08. In 2007-08, the sector accounted for 5.7 percent of GDP.
Trade, communication and registered manufacturing have shown more than 10 percent contribution to GDP growth during 2001-2008; but the communication sector has outperformed other sectors despite its share of total GDP being only 3.6 percent as against the shares of trade and registered manufacturing.
The communication sector has also had a significant impact on employment in the country. It is predicted that the sector will generate an additional 8.5 million jobs by 2014-15, taking the total number of jobs in the sector to 10.3 million.
Olli-Pekka Kallasvuo, President and CEO of Nokia Corporation said, "This study reinforces the view that the communication sector will continue to be an engine of the Indian economy over the next years. There is plenty of potential for growth in the sector considering that teledensity is currently only around 39.8 percent."
Kallasvuo continued, "In India, communication is having a positive impact on employment in the services and retail sectors, and helping the country to emerge as a major manufacturing power. It is critical to empower every individual to connect to people, information and services regardless of their location or income. This is a key element in the vision of a truly inclusive knowledge society."
Image source: National Council of Applied Economic Research