Growth and Structure of the Services Sector in India

The Services sector accounts over one half of India’s GDP. The examination of the Services sector at a reasonably disaggregated level is necessary because the services sector (tertiary sector) is very highly heterogeneous in nature than the primary and the secondary sectors. Further technological advance, the process of globalisation and increased reliance of outsourcing have led to rapid changes in the economic structures of many economies including India. And these changes have resulted in the relatively higher levels of growth of the services sector. This study attempts to understand the growth and structure of the services sector in India through the analysis of the sub-sectors within the services sector at a level of disaggregation that has so far not been adequately analysed in the literature. It identifies sub-sectors within services that have contributed mainly to GDP growth. It also identifies sub-sectors that have contributed mainly to employment growth. The quality of employment in the services sector is examined through the analysis of the productivity levels in different services. The paper also compares the performance of producer services with distributive services and social or personal services.