Service is becoming more important than a Product because:
1. Economic Planning: Government of India launched five year plans in 1951 to achieve rapid growth of the country. Industrialisation requires industrial infrastructure (transport, communication, power, insurance, banking, finance etc.) and social infrastructure (education, medical facilities, community services etc.). Therefore, these services have expanded rapidly in the country.
2. Increasing Urbanisation: Urbanisation has been another cause of expansion of Service sector in India. There has been shifting of population from rural to urban areas. Urbanisation leads to rise in demand for infrastructure services such as communications, public utilities and distribution services.
3. Media: Television, internet and other media have led to spurt in tourism. Modem technology has made business more comfortable. Tourism in turn has promoted all types of services such as hotel, restaurants, travel agents, amusement parks, event management etc. Expanding world trade has also had a demonstration effect.
4. Rise in Per Capita Income: Growing per capita income has led to demand for new and better services. Interior decoration, garden care, beauty parlours, slimming centres, health clubs etc. are examples of these services. More leisure time creates demand for recreation and entertainment services such as water parks, etc.
5. Women Workforce: Higher percentage of women in workforce has created demand for baby sitting, household domestic help and such other personal services.