International Journal of Advanced Research and Development

Authors
Poonam

Abstract
India is a vast country. Indian economy is classified in three sectors: Agriculture and allied services, Industrial sector and Services sector. India is the 2^nd fastest growing economy after China. India is the 3^rd largest economy on the basis of Purchasing Power Parity (PPP) and India is the 7^th largest economy as per nominal GDP. Services sector has become important for many economies in the world and very important particularly in India. The services sector forms a backbone of social and economic development of a region. It is a large and most dynamic part of the Indian economy both in terms of employment potential and contribution to national income. Growth of the services sector is also an important aspect of economic development and is strongly associated with income and economic modernization. As an input to the production process, services are playing an increasing important role in manufacturing industries, world over. At world level, manufacturing sector as a whole has grown moderately in production and employment since last decade. This sector has added steam to its growth parameters and it is predicted that this growth rate will accelerate in the coming years, thus resulting in high demand of Indian professionals in both national as well as international markets. The present paper shows GDP by manufacturing sector (at current prices), employment provided by manufacturing and services sector, correlation coefficient in GDP between manufacturing and services sector and correlation coefficient between employment in manufacturing and services sector. The study takes time period of 62 years i.e. from 1950-51 to 2011-12. This paper aims to show that the increasing use of services in manufacturing has a favorable effect on industrial production.