The service sector, also called the tertiary sector, is one of the three parts of the economy in the

Three-sector hypothesis. This hypothesis breaks the economy into three main areas so it can be better understood. The other two are the primary sector, which covers areas such as farming, mining and fishing; and the secondary sector which covers manufacturing and making things. The service sector provides a service, not an actual product that could be held in your hand. Activities in the service sector include retail, banks, hotels, real estate, education, health, social work, transport, computer services, recreation, media, communications, electricity, gas and water supply. The service sector is an important part of the economy. For example, in Australia in 2007, 85% of all businesses were in the service sector. In 2009 there were more than nine million people employed in the service sector in Australia, which was 86% of all jobs. In India, there has been a huge growth in service sector businesses which made up 55% of India's GDP in 20062007. Computer software businesses in India are increasing at a rate of 35% per year. Increasingly service sector businesses need to focus on what is now being called the knowledge economy. They need to keep ahead of other businesses by understanding what it is their customers want and be in a position to give it to them quickly and at low cost. One good example of this are banks which have gone through enormous changes in recent years. Using information and communication technology, banks have vastly reduced the number of people they need to employ, and lowered the cost of providing bank service. For example, an automated teller machine is able to provide basic banking services 24 hours a day, 7 days a week, in many different places. Before this, banking services were only available from the bank when it was open. Many banks and building societies have joined together to form much lower cost businesses that can make more money from a wider customer base. The key to this process is gaining information about their customers and constantly coming up with new services for them. An example of a company trying to come up with a new service for customers is iCard, which is looking at ways to link mobile phones to computers and social networking.
Differences Between Services and Goods
There are five essential differences between services and goods. The first is that a service is an intangible process that cannot be weighed or measured, whereas a good is a tangible output of a process that has physical dimensions. This distinction has important business implications since a service innovation, unlike a product innovation, cannot be patented. Thus, a company with a new concept must expand rapidly before competitors copy its procedures. Service intangibility also

presents a problem for customers since, unlike with a physical product, they cannot try it out and test it before purchase. The second is that a service requires some degree of interaction with the customer for it to be a service. The interaction may be brief, but it must exist for the service to be complete. Where face-toface service is required, the service facility must be designed to handle the customer's presence. Goods, on the other hand, are generally produced in a facility separate from the customer. They can be made according to a production schedule that is efficient for the company. The third is that services, with the big exception of hard technologies such as ATMs and information technologies such as answering machines and automated Internet exchanges, are inherently heterogeneousthey vary from day to day and even hour by hour as a function of the attitudes of the customer and the servers. Thus, even highly scripted work such as found in call centers can produce unpredictable outcomes. Goods, in contrast, can be produced to meet very tight specifications day-in and day-out with essentially zero variability. In those cases where a defective good is produced, it can be reworked or scrapped. The fourth is that services as a process are perishable and time dependent, and unlike goods, they can't be stored. You cannot come back last week for an air flight or a day on campus. And fifth, the specifications of a service are defined and evaluated as a package of features that affect the five senses. These features are

Supporting facility (location, decoration, layout, architectural appropriateness, supporting equipment). Facilitating goods (variety, consistency, quantity of the physical goods that go with the service; for example, the food items that accompany a meal service). Explicit services (training of service personnel, consistency of service performance, availability and access to the service, and comprehensiveness of the service). Implicit services (attitude of the servers, atmosphere, waiting time, status, privacy and security, and convenience).

Transport
Transport or transportation is the movement of people, animals and goods from one location to another. Modes of transport include air, rail, road, water, cable, pipeline, and space. The field can be divided into infrastructure, vehicles, and operations. Transport is important since it enables trade between peoples, which in turn establishes civilizations. Transport infrastructure consists of the fixed installations necessary for transport, and may be roads, railways, airways, waterways, canals and pipelines, and terminals such as airports, railway stations, bus stations, warehouses, trucking terminals, refueling depots (including fueling docks and fuel stations), and seaports. Terminals may be used both for interchange of passengers and cargo and for maintenance. Vehicles traveling on these networks may include automobiles, bicycles, buses, trains, trucks, people, helicopters, and aircraft. Operations deal with the way the vehicles are operated, and the procedures

set for this purpose including financing, legalities and policies. In the transport industry, operations and ownership of infrastructure can be either public or private, depending on the country and mode. Passenger transport may be public, where operators provide scheduled services, or private. Freight transport has become focused on containerization, although bulk transport is used for large volumes of durable items. Transport plays an important part in economic growth and globalization, but most types cause air pollution and use large amounts of land. While it is heavily subsidized by governments, good planning of transport is essential to make traffic flow, and restrain urban sprawl.

A mode of transport is a solution that makes use of a particular type of vehicle, infrastructure and operation. The transport of a person or of cargo may involve one mode or several modes, with the latter case being called intermodal or multimodal transport. Each mode has its advantages and disadvantages, and will be chosen for a trip on the basis of cost, capability, route, and speed. [edit]Human-powered Main article: Human-powered transport

Human-powered transportremains common in developing countries.

Human powered transport is the transport of people and/or goods using human muscle-power, in the form of walking, running and swimming. Modern technologyhas allowed machines to enhance human-power. Human-powered transport remains popular for reasons of cost-saving, leisure, physical exercise andenvironmentalism. Human-powered transport is sometimes the only type available, especially in underdeveloped or inaccessible regions. It is considered an ideal form of sustainable transportation.

Although humans are able to walk without infrastructure, the transport can be enhanced through the use of roads, especially when using the human power with vehicles, such as bicycles and inline skates. Human-powered vehicles have also been developed for difficult environments, such as snow and water, by watercraft rowing and skiing; even the air can be entered with human-powered aircraft. [edit]Animal-powered Main article: Animal-powered transport Animal-powered transport is the use of working animals for the movement of people and goods. Humans may ride some of the animals directly, use them aspack animals for carrying goods, or harness them, alone or in teams, to pull sleds or wheeled vehicles. [edit]Air Main article: Aviation

An Air France Airbus A318 lands atLondon Heathrow Airport

A fixed-wing aircraft, commonly called airplane, is a heavier-than-air craft where movement of the air in relation to the wings is used to generate lift. The term is used to distinguish from rotary-wing aircraft, where the movement of the lift surfaces relative to the air generates lift. A gyroplane is both fixed-wing and rotary-wing. Fixed-wing aircraft range from small trainers and recreational aircraft to large airliners and military cargo aircraft. Two things necessary for aircraft are air flow over the wings for lift and an area for landing. The majority of aircraft also need an airport with the infrastructure to receive maintenance, restocking, refueling and for the loading and unloading of crew, cargo and passengers. While the vast majority of aircraft land and take off on land, some are capable of take off and landing on ice, snow and calm water. The aircraft is the second fastest method of transport, after the rocket. Commercial jets can reach up to 955 kilometres per hour (593 mph), single-engine aircraft 555 kilometres per hour (345 mph). Aviation is able to quickly transport people and limited amounts of cargo over longer distances, but incur high costs and energy use; for short distances or in inaccessible places helicopters can be used.
[1]

As of April 28,

2009 The Guardian article notes that, "the WHO estimates that up to 500,000 people are on planes at any time."
[2]

[edit]Rail Main article: Rail transport

InterCityExpress, a German high-speedpassenger train

Rail transport is where a train runs along a set of two parallel steel rails, known as a railway or railroad. The rails are anchored perpendicular to ties (or sleepers) of timber, concrete or steel, to maintain a consistent distance apart, or gauge. The rails and perpendicular beams are placed on a foundation made of concrete, or compressed earth and gravel in a bed of ballast. Alternative methods include monorail and maglev. A train consists of one or more connected vehicles that run on the rails. Propulsion is commonly provided by a locomotive, that hauls a series of unpowered cars, that can carry passengers or freight. The locomotive can be powered by steam, diesel or by electricity supplied by trackside systems. Alternatively, some or all the cars can be powered, known as a multiple unit. Also, a train can be powered by horses, cables, gravity, pneumatics andgas turbines. Railed vehicles move with much less friction than rubber tires on paved roads, making trains more energy efficient, though not as efficient as ships. Intercity trains are long-haul services connecting cities;
[3]

modern high-speed rail is capable of speeds up

to 350 km/h (220 mph), but this requires specially built track. Regional and commuter trains feed cities from suburbs and surrounding areas, while intra-urban transport is performed by highcapacity tramways and rapid transits, often making up the backbone of a city's public transport. Freight trains traditionally used box cars, requiring manual loading and unloading of the cargo. Since the 1960s, container trains have become the dominant solution for general freight, while large quantities of bulk are transported by dedicated trains. [edit]Road Main article: Road transport

Interstate 80 near Berkeley, California, United States.

A road is an identifiable route, way or path between two or more places. Roads are typically smoothed, paved, or otherwise prepared to allow easy travel;
[5]

[4]

though they need not be, and historically

[6]

many roads were simply recognizable routes without any formal construction or maintenance. Inurban areas, roads may pass through a city or village and be named as streets, serving a dual function as urban space easement and route.
[7]

The most common road vehicle is the automobile; a wheeled passenger vehicle that carries its own motor. Other users of roads include buses, trucks,motorcycles, bicycles and pedestrians. As of 2002, there were 590 million automobiles worldwide. Automobiles offer high flexibility and with low capacity, but are deemed with high energy and area use, and the main source of noise and air pollution in cities; buses allow for more efficient travel at the cost of reduced flexibility. [edit]Water Main article: Ship transport
[8]

Road transport by truck is often the initial and final stage of freight transport.

Built by the Dutch to transport spices, now used by the local fisherman to get to the sea, Negombo Dutch canal, Sri Lanka

Automobile ferry in Croatia

Water transport is the process of transport a watercraft, such as a barge, boat, ship or sailboat, makes over a body of water, such as a sea, ocean, lake, canal or river. The need for buoyancy unites watercraft, and makes the hull a dominant aspect of its construction, maintenance and appearance. In the 19th century the first steam ships were developed, using a steam engine to drive a paddle wheel orpropeller to move the ship. The steam was produced in a boiler using wood or coal and fed through a steamexternal combustion engine. Now most ships have an internal combustion engine using a slightly refined type of petroleum called bunker fuel. Some ships, such as submarines, use nuclear power to produce the steam.Recreational or educational craft still use wind power, while some smaller craft use internal combustion engines to drive one or more propellers, or in the case of jet boats, an inboard water jet. In shallow draft areas, hovercraft are propelled by large pusher-prop fans. (See Marine propulsion.) Although slow, modern sea transport is a highly efficient method of transporting large quantities of goods. Commercial vessels, nearly 35,000 in number, carried 7.4 billion tons of cargo in 2007. water is significantly less costly than air transport for transcontinental shipping; shipping and ferries remain viable in coastal areas. [edit]Other
[11][12] [10] [9]

Transport by

short sea

modes

Trans-Alaska Pipeline for crude oil

Pipeline transport sends goods through a pipe, most commonly liquid and gases are sent, but pneumatic tubes can also send solid capsules using compressed air. For liquids/gases, any chemically stable liquid or gas can be sent through a pipeline. Short-distance systems exist for sewage, slurry,water and beer, while long-distance networks are used for petroleum and natural gas. Cable transport is a broad mode where vehicles are pulled by cables instead of an internal power source. It is most commonly used at steep gradient. Typical solutions include aerial tramway, elevators, escalator and ski lifts; some of these are also categorized as conveyor transport. Spaceflight is transport out of Earth's atmosphere into outer space by means of a spacecraft. While large amounts of research have gone into technology, it is rarely used except to put satellites into orbit, and conduct scientific experiments. However, man has landed on the moon, and probes have been sent to all the planets of the Solar System. Suborbital spaceflight is the fastest of the existing and planned transport systems from a place on Earth to a distant other place on Earth. Faster transport could be achieved through part of a Low Earth orbit, or following that trajectory even faster using the propulsion of the rocket to steer it. [edit]Elements [edit]Infrastructure Main article: Infrastructure

Bridges, such as Golden Gate Bridge, allow roads and railways to cross bodies of water

Infrastructure is the fixed installations that allow a vehicle to operate. It consists of both a way, terminal and facilities for parking and maintenance. For rail, pipeline, road and cable transport, the entire way the vehicle travels must be built up. Air and water craft are able to avoid this, since the airway andseaway do not need to be built up. However, they require fixed infrastructure at terminals. Terminals such as airports, ports and stations, are locations where passengers and freight can be transferred from one vehicle or mode to another. For passenger transport, terminals are integrating

different modes to allow riders to interchange to take advantage of each mode's advantages. For instance,airport rail links connect airports to the city centers and suburbs. The terminals for automobiles are parking lots, while buses and coaches can operates from simple stops.
[13]

For freight, terminals act

as transshipment points, though some cargo is transported directly from the point of production to the point of use. The financing of infrastructure can either be public or private. Transport is often a natural monopoly and a necessity for the public; roads, and in some countries railways and airports are funded through taxation. New infrastructure projects can involve large spendings, and are often financed through debt. Many infrastructure owners therefore impose usage fees, such as landing fees at airports, or toll plazas on roads. Independent of this, authorities may impose taxes on the purchase or use of vehicles. [edit]Vehicles Main article: Vehicle

An Opel Ampera

A vehicle is any non-living device that is used to move people and goods. Unlike the infrastructure, the vehicle moves along with the cargo and riders. Vehicles that do not operate on land, are usually called crafts. Unless being pulled by a cable or muscle-power, the vehicle must provide its own propulsion; this is most commonly done through a steam engine, combustion engine, electric motor, a jet engine or a rocket, though other means of propulsion also exist. Vehicles also need a system of converting the energy into movement; this is most commonly done through wheels, propellers andpressure. Vehicles are most commonly staffed by a driver. However, some systems, such as people movers and some rapid transits, are fully automated. Forpassenger transport, the vehicle must have a compartment for the passengers. Simple vehicles, such as automobiles, bicycles or simple aircraft, may have one of the passengers as a driver.

[edit]Operation

Incheon International Airport, South Korea

Private transport is only subject to the owner of the vehicle, who operates the vehicle themselves. For public transport and freight transport, operations are done through private enterprise or by governments. The infrastructure and vehicles may be owned and operated by the same company, or they may be operated by different entities. Traditionally, many countries have had a national airline and national railway. Since the 1980s, many of these have been privatized. International shipping remains a highly competitive industry with little regulation, [edit]Function Relocation of travelers and cargo are the most common uses of transport. However, other uses exist, such as the strategic and tactical relocation ofarmed forces during warfare, or the civilian mobility construction or emergency equipment. [edit]Passenger Main articles: Travel and Public transit
[14] [15]

but ports can be public owned.

A local transit bus operated by ACTION inCanberra, Australia

Passenger transport, or travel, is divided into public and private transport. Public is scheduled services on fixed routes, while private is vehicles that provide ad hoc services at the riders desire. The latter offers better flexibility, but has lower capacity, and a higher environmental impact. Travel may be as part of daily commuting, for business, leisure or migration. Short-haul transport is dominated by the automobile and mass transit. The latter consists of buses in rural and small cities, supplemented with commuter rail, trams and rapid transit in larger cities. Long-haul transport involves the use of the automobile, trains, coaches and aircraft, the last of which have become predominantly used for the longest, including intercontinental, travel. Intermodal passenger transport is where a journey is performed through the use of several modes of transport; since all human transport normally starts and ends with walking, all passenger transport can be considered intermodal. Public transport may also involve the intermediate change of vehicle, within or across modes, at a transport hub, such as a busor railway station. Taxis and Buses can be found on both ends of Public Transport spectrum, whereas Buses remain the cheaper mode of transport but are not necessarily flexible, and Taxis being very flexible but more expensive. In the middle is Demand responsive transport offering flexibility whilst remaining affordable. International travel may be restricted for some individuals due to legislation and visa requirements. [edit]Freight Main article: Shipping Freight transport, or shipping, is a key in the value chain in manufacturing.
[17] [16]

With increased

specialization and globalization, production is being located further away from consumption, rapidly increasing the demand for transport. While all modes of transport are used for cargo transport, there is
[18]

high differentiation between the nature of the cargo transport, in which mode is chosen.

Logistics refers

to the entire process of transferring products from producer to consumer, including storage, transport, transshipment, warehousing, material-handling and packaging, with associated exchange of information.
[19] [20]

Incoterm deals with the handling of payment and responsibility of risk during transport.

Freight train with shipping containers in the United Kingdom.

Containerization, with the standardization of ISO containers on all vehicles and at all ports, has revolutionized international and domestic trade, offering huge reduction in transshipment costs. Traditionally, all cargo had to be manually loaded and unloaded into the haul of any ship or car; containerization allows for automated handling and transfer between modes, and the standardized sizes allow for gains in economy of scale in vehicle operation. This has been one of the key driving factors in international trade and globalization since the 1950s.
[21]

Bulk transport is common with cargo that can be handled roughly without deterioration; typical examples are ore, coal, cereals and petroleum. Because of the uniformity of the product, mechanical handling can allow enormous quantities to be handled quickly and efficiently. The low value of the cargo combined with high volume also means that economies of scale become essential in transport, and gigantic ships and whole trains are commonly used to transport bulk. Liquid products with sufficient volume may also be transported by pipeline. Air freight has become more common for products of high value; while less than one percent of world transport by volume is by airline, it amounts to forty percent of the value. Time has become especially important in regards to principles such as postponement and just-in-time within the value chain, resulting in a high willingness to pay for quick delivery of key components or items of high value-to-weight ratio.
[22]

In addition to mail, common items sent by air include electronics and fashion clothing.

[edit]History Main article: History of transport

Bullock team hauling wool in Australia

Humans' first means of transport were walking and swimming. The domestication of animals introduces a new way to lay the burden of transport on more powerful creatures, allowing heavier loads to be hauled, or humans to ride the animals for higher speed and duration. Inventions such as the wheel and sled

helped make animal transport more efficient through the introduction of vehicles. Also water transport, including rowed and sailed vessels, dates back to time immemorial, and was the only efficient way to transport large quantities or over large distances prior to the Industrial Revolution. The first forms of road transport were horses, oxen or even humans carrying goods over dirt tracks that often followed game trails. Paved roads were built by many early civilizations, including Mesopotamia and the Indus Valley Civilization. The Persian and Roman empires built stone-paved roads to allow armies to travel quickly. Deep roadbeds of crushed stone underneath ensured that the roads kept dry. The medieval Caliphate later built tar-paved roads. The first watercraft were canoes cut out from tree trunks. Early water transport was accomplished with ships that were either rowed or used the wind for propulsion, or a combination of the two. The importance of water has led to most cities, that grew up as sites for trading, being located on rivers or at sea, ofter at the intersection of two bodies of water. Until the Industrial Revolution, transport remained slow and costly, and production and consumption were located as close to each other as feasible.

The Wright Brothers' first flight in 1903

The Industrial Revolution in the 19th century saw a number of inventions fundamentally change transport. With telegraphy, communication became instant and independent of transport. The invention of the steam engine, closely followed by its application in rail transport, made land transport independent of human or animal muscles. Both speed and capacity increased rapidly, allowing specialization through manufacturing being located independent of natural resources. The 19th century also saw the development of the steam ship, that sped up global transport. With the development of the combustion engine and the automobile at the turn into the 20th century, road transport became more viable, allowing the introduction of mechanical private transport. The first highways were constructed during the 19th century with macadam. Later, tarmac and concretebecame the dominant paving material. In 1903, the first controllable airplane was invented, and after World War I, it became a fast way to transport people and express goods over long distances.
[23]

After World War II, the automobile and airlines took higher shares of transport, reducing rail and water to freight and short-haul passenger.
[24]

Spaceflight was launched in the 1950s, with rapid growth until the
[21]

1970s, when interest dwindled. In the 1950s, the introduction of containerization gave massive efficiency gains in freight transport, permitting globalization. International air travel became much more

accessible in the 1960s, with the commercialization of the jet engine. Along with the growth in automobiles and motorways, this introduced a decline for rail and water transport. After the introduction of the Shinkansen in 1964, high-speed rail in Asia and Europe started taking passengers on long-haul routes from airlines.
[24]

Early in U.S. history, most aqueducts, bridges, canals, railroads, roads, and tunnels were owned by private joint-stock corporations. Most such transportation infrastructure came under government control in the late 19th and early 20th centuries, culminating in the nationalization of inter-city passenger rail service with the creation of Amtrak. Recently, however, a movement to privatize roads and other infrastructure has gained some ground and adherents.
[25]

Further information: Timeline of transportation technology [edit]Impact [edit]Economic

Transport is a key component of growth and globalization, such as in Seattle, Washington, United States

Transport is a key necessity for specializationallowing production and consumption of products to occur at different locations. Transport has throughout history been a spur to expansion; better transport allows more trade and a greater spread of people. Economic growth has always been dependent on increasing the capacity and rationality of transport.
[26]

But the infrastructure and operation of transport has a great

impact on the land and is the largest drainer of energy, making transport sustainability a major issue. Modern society dictates a physical distinction between home and work, forcing people to transport themselves to places of work or study, as well as to temporarily relocate for other daily activities. Passenger transport is also the essence of tourism, a major part of recreational transport. Commerce

requires the transport of people to conduct business, either to allow face-to-face communication for important decisions or to move specialists from their regular place of work to sites where they are needed. [edit]Planning Main article: Transport planning Transport planning allows for high utilization and less impact regarding new infrastructure. Using models of transport forecasting, planners are able to predict future transport patterns. On the operative level, logistics allows owners of cargo to plan transport as part of the supply chain. Transport as a field is studied through transport economics, the backbone for the creation of regulation policy by authorities. Transport engineering, a sub-discipline of civil engineering, and must take into account trip generation, trip distribution, mode choice and route assignment, while the operative level is handled through traffic engineering.

The engineering of this roundabout inBristol, United Kingdom, attempts to make traffic flow free-moving

Because of the negative impacts made, transport often becomes the subject of controversy related to choice of mode, as well as increased capacity. Automotive transport can be seen as a tragedy of the commons, where the flexibility and comfort for the individual deteriorate the natural and urban environment for all. Density of development depends on mode of transport, with public transport allowing for better spacial utilization. Good land use keeps common activities close to peoples homes and places higher-density development closer to transport lines and hubs; minimize the need for transport. There are economies of agglomeration. Beyond transportation some land uses are more efficient when clustered. Transportation facilities consume land, and in cities, pavement (devoted to streets and parking) can easily exceed 20 percent of the total land use. An efficient transport system can reduce land waste. Too much infrastructure and too much smoothing for maximum vehicle throughput means that in many cities there is too much traffic and manyif not allof the negative impacts that come with it. It is only in recent years that traditional practices have started to be questioned in many places, and as a result of new types of analysis which bring in a much broader range of skills than those traditionally relied on

spanning such areas as environmental impact analysis, public health, sociologists as well as economists who increasingly are questioning the viability of the old mobility solutions. European cities are leading this transition. [edit]Environment

Traffic congestion persists in So Paulo, Brazil despite the no-drive days based on license numbers.

Main article: Transport and the environment Transport is a major use of energy and burns most of the world's petroleum. This creates air pollution, including nitrous oxides and particulates, and is a significant contributor to global warming through emission of carbon dioxide,
[27] [28]

for which transport is the fastest-growing emission sector.

[29]

By subsector,

road transport is the largest contributor to global warming.

[27]

Environmental regulations in developed

countries have reduced individual vehicles' emissions; however, this has been offset by increases in the numbers of vehicles and in the use of each vehicle. road vehicles considerably have been studied.
[30][31]

Some pathways to reduce the carbon emissions of

Energy use and emissions vary largely between

modes, causingenvironmentalists to call for a transition from air and road to rail and human-powered transport, as well as increased transport electrification and energy efficiency. Other environmental impacts of transport systems include traffic congestion and automobileoriented urban sprawl, which can consume natural habitat and agricultural lands. By reducing transportation emissions globally, it is predicted that there will be significant positive effects on Earth's air quality,acid rain, smog and climate change.
[32]

Some Transport Related Services Shipping

Shipping is an important indicator of both commodity and services trade of any country. It plays an important role in the Indian economy with around 95 per cent of the countrys trade by volume and 68 per

cent in terms of value being transported by sea. As on 1 January 2012, India had a fleet strength of 1,122 ships with Gross Tonnage (GT) of 11.06 million, the public-sector Shipping Corporation of India having the largest share of 36.17 per cent. Of this, 372 ships with10.01 million GT cater toIndias overseas trade and the rest to coastal trade. The gross foreign exchange earnings/savings of Indian ships in 201011 were ` 10,666.45 crore. Leaving aside the flag of convenience countries, the country with the highest dead weight tonnage (DWT) is Hong Kong. Though India has one of the largest merchant shipping fleets among developing countries, it is ranked eighteenth in the world in terms of DWT with a share of only 1.09 per cent as on 1 January 2011. In comparison, China is ranked ninth with a share of 3.78 per cent (Table 10.7). Indian vessels are also relatively older than the international average.
As on December 2011,44 per cent of the fleet was over 20 years of age and 12 per cent in the age group of 16-20 years. According to preliminary estimates by UNCTAD, at 8.94 million Twentyfoot Equivalent Units of Container (TEUs) in 2010, India was ranked eighth among developing countries in terms of container ship operation with a world share of 0.32 per cent. UNCTAD further classifies India (ranked 17th) as one of the top 20 economies for shipbuilding based on deliveries in the year 2010 (37 vessels of 136,000 DWT), though its share is only 0.11 per cent in the world. India is also one of the major nations undertaking ship-breaking service. In 2010, with a world share of 32.43 per cent, it topped the list of shipscrapping nations, scrapping 451 ships with 9.28 million DWT. India is also one of the major countries supplying seafarers. At third rank and with a 7.5 per cent share in 2010, it supplied 46,497 officers to the global shipping industry. However, India is ranked 22nd in 2011 according to the UNCTAD liner shipping index, down from 21st position in 2004. The global shipping industry has been experiencing turbulent waters in the year 2011 due to the economic slowdown. Indian shipping companies faced problems of restricted cash inflows in 2011-12 due to very low charter hire and freight rates in all segments of shipping. These difficult economic conditions have been prevailing since 2008 with small windows of relief in 2011-12. Most Indian shipping companies that have been able to better manage their businesses have been those with a diversified presence across shipping segments or businesses. While the bulkers and tankers segments have seen a downturn, the offshore segment with jack ups and sub-sea vessels has ensured cash visibility for companies. Further, the incidence of piracy has been of great concern to the government. The government has deployed naval vessels for assistance to merchant vessels in the piracy-affected areas. As on 17th February 2012, 27 Indian seafarers are in the custody of somalian pirates. The government has been raising the issue of piracy and the need for more concerted international action at the meetings of the United Nations and the International Maritime Organization (IMO). In order to provide the shipping industry a partial level playing field and make it competitive at international level, the government implemented certain policies in 2011 like giving a minimum depreciation of 3.34 per cent (assuming life of 30 years) to drilling rigs; granting exemption on 29 July 2011 to ships falling under Chapter 8901 from additional customs duty and excise duty provided a general license under section 406 of the Merchant Shipping Act 1958 is granted by the Director General

shipping; and exemption from import duty for spares and capital goods required by ship owners in Budget 2011-12. While Indias overseas seaborne trade has been growing substantially over the years, from 224.62 million tonnes in 1999-2000 to 570 million tonnes in 2010-11, there has been sharp decline in the share of Indian ships in the carriage of Indias overseas trade. From about 40 per cent in the late 1980s, this share has declined to 9 per cent in 2010- 11 with an 18 per cent share in Indias oil imports in 2009-10. Given the relatively low participation of Indian ships in Indias trade and given the fact that Indian ships are ageing, with the average age of the Indian fleet increasing from 15 years in 1999 to 18.37 years in 2012, there is urgent need to increase the shipping fleet so that it is at least enough to meet Indias trade volumes. Higher asset size of Indian shipping will not only lead to higher growth of the economy but also higher employment and high foreign exchange earnings/savings. The estimated freight bill of India in 2011-12, based on 7.5 per cent of the value of seaborne trade, total US$ 57 billion and estimates show that a 5 per cent increase in tonnage could lead to a US$ 6.3 billion saving/earning of foreign exchange. Strengthening the Indian fleets with adequate and cheap finance is important given the fact that ship prices which had peaked in the middle of 2007-8 are nearer to the lows seen in December 2009. Rationalizing the multiple levies in the shipping sector could also help.

Communication Services
Telecom and Related Services
10.38 Indian telecom has proved to be an international success story with the sector witnessing commendable growth over the past few years. The Indian telecom network is ranked as the second largest in the world, next only to China. The total number of telephones has increased from 206.83 million on 31 March 2007 to 926.53 million as on 31 December 2011. The growth in wireless connections has been phenomenal, reaching 893.84 million connections at the end of December 2011, taking their share to over 96 per cent of total telephones in the country. Tele-density, which is an important indicator of telecom penetration, has increased from 18.31 per cent in March 2007 to 76.86 per cent in December 2011. While urban tele-density as of December 2011 has reached a high level of 167.85 per cent, at 37.48 per cent rural tele-density is low, signifying the potential for further growth in rural areas. The liberal policy regime facilitated the growth of the sector and lowered the costs for consumers, though the recent court cases related to the telecom sector have dampened the mood. The sentiments in this sector could be lifted by further reforms which could include rationalization of the multiple levies and taxes and using mobile services in the delivery of different social welfare schemes which can increase its rural penetration. The draft National Telecom Policy 2011 has similar objectives. 10.39 Since the announcement of the Broadband Policy in 2004, several measures have been taken to promote broadband penetration in the country. As a result, there are 13.30 million broadband subscribers as on 31 December 2011 and 19.69 million internet subscribers at the end of March 2011. However, broadband has lagged behind the growth of telephones in India. Special efforts are being made to increase the penetration of broadband, especially

in rural and remote areas. The upcoming decade is likely to usher in an information era through Mobile Value Added Services (MVAS) and Broadband for All. The successfully concluded auction of the Broadband Wireless Access (BWA) / 3G spectrum and National Optical Fiber Network will enhance wireless broadband penetration and help connect the remotest locations across India (For further details, see Chapter 11).

Posts
10.40 India Post has the largest postal network in the world with 154,866 post offices across the length and breadth of the country as of 31 March 2011. On an average, each post office serves 7,814 persons with coverage of approximately 21.23 sq. km. As many as 139,040 post offices are in rural areas, while 15,826 are in urban areas. In addition to its own network, the Department of Posts also serves through 1155 franchisee outlets in areas where it is not possible to open post offices. 10.41 Government has launched Project Arrow in 2008 to transform the existing India Post infrastructure across the country by upgrading key postal operations such as mail delivery, remittance, and banking services. India Post is emerging as a one-stop shop for retail products and offers a single window facility for banking, money remittances, and other financial products. In addition, India Post has been given the responsibility of disbursing wages to beneficiaries of the Mahatama Gandhi National Rural Employment Guarantee Act (MGNREGA) through 96,895 post offices. The postal network is also being used by other government departments/agencies to collect data like the rural consumer price index. The postal sector needs to keep pace with changing times as many of its services have become redundant with growth in technology and takeover by other players. Quick decisions and actions to stay abreast of the times including switching over to new activities and downsizing could release a lot of resources from this sector for use elsewhere.

CHALLENGES AND OUTLOOK

Outlook
10.70 Indias services sector has been resilient even during the tumultuous years of the global economic crisis maintaining a steady growth of around 10 per cent. This happened even when overall GDP growth dipped sharply to 6.7 per cent in 2008-9. A dissection of the growth rates of different services shows that this resilience was, to some degree, due to the governments policies of higher social expenditure and commitments for pay arrears under the new revised scale for government employees resulting in very high growth rates of 12.5 per cent and 12.0 per cent in community, social, and personal services in

2008-9 and 2009-10. Public administration and defence grew at a spectacular 19.8 per cent and 18.2 per cent in these two years compared to 1.9 per cent and 7.6 per cent in 2006-7 and 2007-8 respectively. The impact of the global crisis was, however, evident in the trade, hotels, and restaurants and construction categories and with lagged effect in real estate / ownership of dwellings and business services in 2008-9 and 2009-10; and to some extent in banking and insurance in 2009-10. 10.71 Moving forward in 2011-12, though there is slight moderation in services growth to 9.4 per cent (as also in 2010-11), there is no cause for worry, as it is due to the steep fall in growth of public administration and defence services reflecting fiscal consolidation of the government. In fact growth in trade, hotels & restaurants, transport, storage and communication is more robust at 11.2 per cent and retail-sector growth is expected to be more robust in 2012-13. With hardening of interest rates, the real worry would be with the real estate/ ownership of dwellings and business services segment, the growth of which has started decelerating and construction services with growth falling by nearly half. The outlook of the services sector in the domestic economy is linked to the prospects of the sector externally. While software service exports have continued to be steady, the unfolding events in the euro area could lead to some sluggishness in this sector. The fair-weather business services exports which have already shown signs of deceleration may not get better. Among the other two major services, transportation has already been affected with the Baltic Dry Index at an all-time low, although this may be a passing phenomenon. While travel and tourism could also be affected when the pockets of euro zone tourists are affected, it could also lead to a shift in tourist inflow pattern with increased inflow of holiday backpackers searching for cheaper destinations like India. Rise in tourists from South Asia, East Asia, and South East Asia could further help this sector. While the net effect of the trade sector on GDP has always been negative for India, it could go down further if less cushion is provided by net services trade to GDP. However, the domestic economy is more dominant in the case of services and any changes in government spending in community, social, and personal services within the fiscal space available or newly created fiscal space could strengthen the growth prospects of the services sector with ripple effects in related sectors. Use of tablet PC in Education

Tablets have become the vehicle for a new trend in education, where students use handheld devices to interact with courseware. When the iconic iPad was launched, most analysts were of the opinion that

this device would remain confined to the luxury segment, primarily because of its high price. But now a wide range of cheaper models have become available. For instance, there is Aakash. Aakash has been promoted by the Government as a device that can bridge the digital divide across the country. However, it was not a great sucess but it inspired many other players to come up with their low priced tablets. Now the Government has launch its second version of the Aakash tablet, which boasts fbetter hardware features. According to market reports, the country saw sales of about 475,000 units of media tablets in the last calendar year. Report from research firm Frost & Sullivan says the tablet PC user base in India has increased from 60,000 units in 2010 to 300,000 in 2011. The report further says that overall TabletPC user base is likely to grow at a CAGR of 107 per cent to reach 23.38 million by 2017. Adoption of tablets in education is likely to grow at fast pace. In terms of sales, the market size in India is expected to grow to 500,000 units by end of this year. However, even with such high numbers, we will not be reaching even the Five percent of the education space and that is why this is a huge opportunity. Tablet market is set to keep growing at a rapid pace, informs Abbhishek, CEO, Kloudpad. Heavy bags, personalised learning, interactivity and reservation to the classroom have always been a challenge in conventional classroom learning environment, which is answered by tablet to a large extent. Still, lot more innovations and improvements are required and these will be addressed by upgradation of tablets. Computerisation started with heavy desktops in computer labs and then we had the advent of laptops. Now there is a unified learning wherein desktops, laptops, tablets and smartphones are playing their role in imparting education. Tablet is usually a 7 to 10 inches form factor and it works on different mobile operating Systems like iOs, Android, and Microsoft Windows. It is now well accepted as platform for interactive and personalised learning. The teacher can easily explain concepts using the digital whiteboard that is set up in the Tablet PC. Using learning tablets the students can access what was taught in the classroom and can also access the collaborative learning platform for discussions on relevant topics taught in the classroom. Students can have the benefits of studying from the best faculties from across the globe.