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EXTERNAL TRADE
CHAPTER 4
Service Sector and Business
LEARNING OBJECTIVES
After studying this chapter, you should be able to :
•
identify the different types of financial services;
•
explain the functions of commercial banks;
•
appreciate the significance of insurance;
•
describe how business risks can be covered;
•
identify the different types of warehouses;
•
analyse the recent trends in communication.
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BUSINESS STUDIES
4.1 Introduction
In the previous chapter we have
discussed the structure and scope of
business and also outlined the
importance of e-commerce and
outsourcing of services. In the recent
past, role of service sector in the Indian
economy is growing faster than
industry and agriculture. This chapter
is devoted to the explanation of types,
functions and principles of banking,
insurance, communication and
warehousing sectors of the Indian
economy.
The era of economic liberalisation
has ushered in a rapid change in the
service industry in recent years. As a
result, one can witness today the
flooding of innovative services in the
business world, not only around the
country, but also, around the world.
The current economic scenario is
clearly characterised by a radical
reorganisation of the service industry,
which has branched out into many
fields (travel, transportation, adver-
tising, equities, telecommunications,
consultancies, janitorial services,
engineering, tax and accounting, and
so on). A variety of services is available
to meet both the dynamic changes in
the economy and the diverse
requirements of the investors. Thus,
the significance of services is gaining
momentum and no wonder; it has
become a major thrust area in the field
of business.
4.2 Banking, Finance and Insurance
Business enterprises in India are
closely linked with the financial
markets and institutions. The flow of
savings provides funds for investment
in industry, trade and service
organisations. The banking system
ensures this smooth flow of money to
business. Thus, the financial interme-
diaries and financial instruments