Topic 25: Service Sector & Infrastructure: Energy, Transportation, Communication

Study Material

Paper Paper I

Unit 2

1. India's service sector contributes ~54% of GDP (2024–25) and employs approximately 32% of the workforce. It includes IT/ITES, banking, insurance, trade, transport, communication, and real estate. India is the world's largest services exporter in IT/ITES — IT services exports: $227 billion (2023–24).
2. Eight Core Infrastructure Industries (Index of Eight Core Industries — ICI): Coal, crude oil, natural gas, refinery products, fertilizers, steel, cement, electricity — together have 40.27% weight in IIP (Index of Industrial Production). These are monitored monthly by Ministry of Commerce.
3. India's installed electricity generation capacity is 950+ GW (April 2025, including all sources); renewable energy exceeds 220 GW; per capita electricity consumption: 1,357 kWh (2023–24). PM Surya Ghar Muft Bijli Yojana (2024): free electricity to 1 crore households via rooftop solar.
4. Bharatmala Pariyojana Phase-I (approved 2017): develops 34,800 km of National Highways including economic corridors, inter-corridors, ring roads, and border/coastal roads. Total outlay: ₹5.35 lakh crore. By March 2024, ~17,000 km awarded; ~10,000 km constructed.
5. Indian Railways: World's 4th largest railway network — 68,702 km of route (2024); carries 24 million passengers/day. Key projects: Vande Bharat Express (40 trainsets operational by 2024); dedicated freight corridors (Eastern + Western DFC: 3,005 km; EDFC operational 2022); PM Gati Shakti for 3 new rail corridors approved (2023–24 Budget).
6. National Logistics Policy (NLP), 2022: aims to reduce India's logistics cost from ~13% of GDP to 8% by 2030 (global average ~8%). Creates unified digital logistics platform; DPIIT as nodal ministry; targets top 25 in World Bank Logistics Performance Index (India: 38th in 2023).
7. UDAN (Ude Desh Ka Aam Naagrik) scheme, launched October 2016, aims to make air travel affordable for common citizens by subsidising regional routes. By 2024, 479 routes operational under UDAN; 89 airports developed/operationalised. India is the world's 3rd largest civil aviation market.
8. Digital connectivity: India has 1.18 billion mobile phone subscribers (March 2025) — 2nd globally after China; 832+ million internet users; BharatNet (Phase II) aims to connect 2.5 lakh gram panchayats via optical fibre. 5G launched October 2022; coverage expanded to 700+ districts (2024).
9. Sagarmala Programme (2015): India's port-led development initiative targeting modernisation of 12 major ports, development of coastal shipping, and port connectivity projects — 802 projects worth ₹5.48 lakh crore. India's major ports handled 819 MT of cargo in 2022–23, targeting 1,695 MT by 2025.
10. Energy security: India's primary energy consumption: 1,025 Mtoe (million tonnes of oil equivalent, 2022–23) — world's 3rd largest energy consumer after China and USA. Oil imports: ~$232 billion (2022–23). National Green Hydrogen Mission (2023) targets 5 MMTPA green hydrogen by 2030 to reduce fossil fuel import dependency.
11. PM Gati Shakti National Master Plan (October 2021): Integrates 16 central ministries on a single digital platform for coordinated infrastructure planning and delivery. Aims to reduce project approval time, eliminate duplication, and reduce logistics cost. Covers roads, railways, aviation, ports, waterways, pipelines, digital infrastructure.
12. Telecom sector: India's telecom market is the world's 2nd largest by subscriber base. Three major private operators (Reliance Jio, Airtel, Vodafone Idea) + BSNL (public). Jio's 2016 entry transformed the market — data prices fell 95%; India has world's cheapest mobile data (~$0.17/GB, 2023). Telecom Act 2023 replaced obsolete Indian Telegraph Act 1885.

Key facts

India's service sector contributes ~54% of GDP (2024–25) and employs approximately 32% of the workforce.
Eight Core Infrastructure Industries (Index of Eight Core Industries
India's installed electricity generation capacity is 950+ GW (April 2025, including all sources); renewable energy exceeds 220 GW;
Bharatmala Pariyojana Phase-I (approved 2017): develops 34,800 km of National Highways including economic corridors, inter-corridors, ring roads, and…
Indian Railways: World's 4th largest railway network

Key Points at a Glance

1
India's service sector contributes ~54% of GDP (2024–25) and employs approximately 32% of the workforce. It includes IT/ITES, banking, insurance, trade, transport, communication, and real estate. India is the world's largest services exporter in IT/ITES — IT services exports: $227 billion (2023–24).
2
Eight Core Infrastructure Industries (Index of Eight Core Industries — ICI): Coal, crude oil, natural gas, refinery products, fertilizers, steel, cement, electricity — together have 40.27% weight in IIP (Index of Industrial Production). These are monitored monthly by Ministry of Commerce.
3
India's installed electricity generation capacity is 950+ GW (April 2025, including all sources); renewable energy exceeds 220 GW; per capita electricity consumption: 1,357 kWh (2023–24). PM Surya Ghar Muft Bijli Yojana (2024): free electricity to 1 crore households via rooftop solar.
4
Bharatmala Pariyojana Phase-I (approved 2017): develops 34,800 km of National Highways including economic corridors, inter-corridors, ring roads, and border/coastal roads. Total outlay: ₹5.35 lakh crore. By March 2024, ~17,000 km awarded; ~10,000 km constructed.
5
Indian Railways: World's 4th largest railway network — 68,702 km of route (2024); carries 24 million passengers/day. Key projects: Vande Bharat Express (40 trainsets operational by 2024); dedicated freight corridors (Eastern + Western DFC: 3,005 km; EDFC operational 2022); PM Gati Shakti for 3 new rail corridors approved (2023–24 Budget).
6
National Logistics Policy (NLP), 2022: aims to reduce India's logistics cost from ~13% of GDP to 8% by 2030 (global average ~8%). Creates unified digital logistics platform; DPIIT as nodal ministry; targets top 25 in World Bank Logistics Performance Index (India: 38th in 2023).
7
UDAN (Ude Desh Ka Aam Naagrik) scheme, launched October 2016, aims to make air travel affordable for common citizens by subsidising regional routes. By 2024, 479 routes operational under UDAN; 89 airports developed/operationalised. India is the world's 3rd largest civil aviation market.
8
Digital connectivity: India has 1.18 billion mobile phone subscribers (March 2025) — 2nd globally after China; 832+ million internet users; BharatNet (Phase II) aims to connect 2.5 lakh gram panchayats via optical fibre. 5G launched October 2022; coverage expanded to 700+ districts (2024).
9
Sagarmala Programme (2015): India's port-led development initiative targeting modernisation of 12 major ports, development of coastal shipping, and port connectivity projects — 802 projects worth ₹5.48 lakh crore. India's major ports handled 819 MT of cargo in 2022–23, targeting 1,695 MT by 2025.
10
Energy security: India's primary energy consumption: 1,025 Mtoe (million tonnes of oil equivalent, 2022–23) — world's 3rd largest energy consumer after China and USA. Oil imports: ~$232 billion (2022–23). National Green Hydrogen Mission (2023) targets 5 MMTPA green hydrogen by 2030 to reduce fossil fuel import dependency.
11
PM Gati Shakti National Master Plan (October 2021): Integrates 16 central ministries on a single digital platform for coordinated infrastructure planning and delivery. Aims to reduce project approval time, eliminate duplication, and reduce logistics cost. Covers roads, railways, aviation, ports, waterways, pipelines, digital infrastructure.
12
Telecom sector: India's telecom market is the world's 2nd largest by subscriber base. Three major private operators (Reliance Jio, Airtel, Vodafone Idea) + BSNL (public). Jio's 2016 entry transformed the market — data prices fell 95%; India has world's cheapest mobile data (~$0.17/GB, 2023). Telecom Act 2023 replaced obsolete Indian Telegraph Act 1885.

Why does service-sector and infrastructure development matter for RAS?

Service-sector and infrastructure development matters for RAS because it links India's growth model with questions on competitiveness, logistics, manufacturing, energy access, digital inclusion, and public investment.

India's service sector is the engine of its economic growth, yet the country's physical infrastructure has historically been the biggest drag on competitiveness. Topic 25 is consistently examined (all 5 years, 5.2 marks/year average) because infrastructure is central to every economic debate: logistics costs, manufacturing competitiveness, rural connectivity, energy access, and the digital economy.

The 2023 exam asked about the National Logistics Policy (5 marks) and PM Gati Shakti's three railway corridors (2 marks). The 2021 exam asked about the 8 core infrastructure industries (2 marks). The 2018 exam gave 10 marks to infrastructure. For 2026, expect questions on PM Gati Shakti, renewable energy targets, UDAN, and the National Logistics Policy.

India's infrastructure spending has been rising sharply. The Ministry of Finance's PIB release on Union Budget 2024-25 states that the Budget allocated ₹11,11,111 crore for capital expenditure, equal to 3.4% of GDP. This was up from ₹4.39 lakh crore in 2019-20 and reflects a deliberate "capex push" strategy to crowd in private investment, improve long-term productivity, and generate employment.

For answer-writing, the safest frame is simple: services provide the growth impulse, while infrastructure decides whether that growth becomes broad-based, export-competitive, and regionally inclusive. Roads, railways, ports, power, telecom, and digital public infrastructure should therefore be read as one connected economic system, not as isolated schemes.

Sign up free to claim an intro topic

The first gated topic you open stays yours; the rest needs a Study Pack or Complete Course.

PREDICTED Predicted RAS Questions

Based on PYQ trends and 2026 syllabus analysis

1 5M What is PM Gati Shakti National Master Plan? State its objectives. 5 marks · 50 words

Model Answer

PM Gati Shakti National Master Plan (launched October 2021) is a GIS-based digital platform integrating 16 central ministries for coordinated infrastructure planning. Objectives: eliminate inter-ministerial project delays, reduce logistics cost from 13% of GDP to 8% by 2030, ensure multi-modal connectivity from project inception, and map all infrastructure projects (roads, railways, ports, pipelines, telecom) to enable holistic greenfield planning.

~50 words • 5 marks