IDEAS home Printed from https://ideas.repec.org/p/ess/wpaper/id2604.html
   My bibliography  Save this paper

The Service Sector as India’s Road to Economic Growth?

Author

Listed:
  • Barry Eichengreen
  • Poonam Gupta

Abstract

Among fast growing developing countries, India is distinctive for the role of the service sector. However, sceptics have raised doubts about both the quality and sustainability of the increase in service sector activity and its implications for economic development. Using National Accounts Statistics and cross-county data, we show that the growth of services has been broad-based. We show that the growth of service sector employment is not simply disguised manufacturing activity. We also find that the skilled-unskilled mix of labour in the two sectors is becoming increasingly similar. Hence, it is no longer obvious that manufacturing is the main destination for the vast majority of Indian labour moving into the modern sector and that modern services are only a viable destination for the highly skilled few. To the extent that the expansion of both modern manufacturing and modern services is constrained by the availability of skilled labour, this just underscores the importance for India of continuing to invest in labour skills. We conclude that sustaining economic growth and raising living standards will require shifting labour out of agriculture into both manufacturing and services and not just into one or the other.[Working Paper No. 249]

Suggested Citation

  • Barry Eichengreen & Poonam Gupta, 2010. "The Service Sector as India’s Road to Economic Growth?," Working Papers id:2604, eSocialSciences.
    • Handle: RePEc:ess:wpaper:id:2604
    Note: Institutional Papers
    as

    Download full text from publisher

    File URL: http://www.esocialsciences.org/Download/repecDownload.aspx?fname=Document12462010492.712429E-03.pdf&fcategory=Articles&AId=2604&fref=repec
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Barry Eichengreen & Poonam Gupta, 2013. "The two waves of service-sector growth," Oxford Economic Papers, Oxford University Press, vol. 65(1), pages 96-123, January.
    2. Kochhar, Kalpana & Kumar, Utsav & Rajan, Raghuram & Subramanian, Arvind & Tokatlidis, Ioannis, 2006. "India's pattern of development: What happened, what follows?," Journal of Monetary Economics, Elsevier, vol. 53(5), pages 981-1019, July.
    3. Panagariya, Arvind, 2011. "India: The Emerging Giant," OUP Catalogue, Oxford University Press, number 9780199751563.
    4. Devesh Kapur & Pratap Bhanu Mehta, 2004. "Indian Higher Education Reform: From Half-Baked Socialism to Half-Baked Capitalism," CID Working Papers 108, Center for International Development at Harvard University.
    5. J. Bradford Jensen & Lori G. Kletzer, 2005. "Tradable Services: Understanding the Scope and Impact of Services Outsourcing," Working Paper Series WP05-9, Peterson Institute for International Economics.
    6. Rashmi Banga & B.N.Goldar, 2004. "Contribution of services to output growth and productivity in Indian manufacturing: Pre and post reforms," Indian Council for Research on International Economic Relations, New Delhi Working Papers 139, Indian Council for Research on International Economic Relations, New Delhi, India.
    7. Jagdish N. Bhagwati, 1984. "Splintering and Disembodiment of Services and Developing Nations," The World Economy, Wiley Blackwell, vol. 7(2), pages 133-144, June.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Utsav Kumar, 2014. "India's Demographic Transition: Boon or Bane?," Asia and the Pacific Policy Studies, Wiley Blackwell, vol. 1(1), pages 186-203, January.
    2. Shingal, ANIRUDH, 2010. "Services growth and convergence: Getting India’s states together," MPRA Paper 32813, University Library of Munich, Germany.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Barry Eichengreen & Poonam Gupta, 2011. "The Service Sector as India’s Road to Economic Growth?," India Policy Forum, National Council of Applied Economic Research, vol. 7(1), pages 1-42.
    2. Barry Eichengreen & Poonam Gupta, 2010. "The Service Sector as India’s Road to Economic Growth?," Development Economics Working Papers 23030, East Asian Bureau of Economic Research.
    3. Gupta, Poonam & Kumar, Utsav, 2010. "Performance of Indian Manufacturing in the Post Reform Period," MPRA Paper 24898, University Library of Munich, Germany.
    4. K L Krishna & Deb Kusum Das & Abdul A Erumban & Suresh Aggarwal & Pilu Chandra Das, 2016. "Productivity Dynamics In India’S Service Sector: An Industry-Level Perspective," Working papers 261, Centre for Development Economics, Delhi School of Economics.
    5. Mishra, Saurabh & Lundstrom, Susanna & Anand, Rahul, 2011. "Service export sophistication and economic growth," Policy Research Working Paper Series 5606, The World Bank.
    6. Gupta, Poonam & Hasan, Rana & Kumar, Utsav, 2009. "Big Reforms but Small Payoffs: Explaining the Weak Record of Growth and Employment in Indian Manufacturing," MPRA Paper 13496, University Library of Munich, Germany.
    7. Ghani,Syed Ejaz & Grover,Arti & Kerr,Sari & Kerr,William Robert, 2016. "Will market competition trump gender discrimination in India ?," Policy Research Working Paper Series 7814, The World Bank.
    8. Singh, Nirvikar, 2006. "Services-led industrialization in India: Assessment and lessons," MPRA Paper 1276, University Library of Munich, Germany.
    9. Baldwin, Richard & Forslid, Rikard, 2023. "Globotics and Development: When Manufacturing Is Jobless and Services Are Tradeable," World Trade Review, Cambridge University Press, vol. 22(3-4), pages 302-311, October.
    10. Beretta, Silvio & Targetti Lenti, Renata, 2011. "“India in the Outsourcing/Offshoring Process: A Western Perspective” - L’India nel processo di outsourcing/offshoring: un punto di vista occidentale," Economia Internazionale / International Economics, Camera di Commercio Industria Artigianato Agricoltura di Genova, vol. 64(3), pages 269-296.
    11. Singh, Nirvikar, 2008. "India’s Development Strategy: Accidents, Design and Replicability," MPRA Paper 12453, University Library of Munich, Germany.
    12. Poonam Gupta & Rana Hasan & Utsav Kumar, "undated". "What Constrains Indian Manufacturing?," Indian Council for Research on International Economic Relations, New Delhi Working Papers 211, Indian Council for Research on International Economic Relations, New Delhi, India.
    13. Alessandrini, Michele & Fattouh, Bassam & Ferrarini, Benno & Scaramozzino, Pasquale, 2011. "Tariff liberalization and trade specialization: Lessons from India," Journal of Comparative Economics, Elsevier, vol. 39(4), pages 499-513.
    14. Laura Alfaro & Anusha Chari, 2009. "India Transformed? Insights from the Firm Level 1988-2005," Harvard Business School Working Papers 10-030, Harvard Business School.
    15. Erumban, Abdul Azeez & Das, Deb Kusum & Aggarwal, Suresh & Das, Pilu Chandra, 2019. "Structural change and economic growth in India," Structural Change and Economic Dynamics, Elsevier, vol. 51(C), pages 186-202.
    16. Singh, Nirvikar, 2010. "The Dynamics and Status of India’s Economic Reforms," MPRA Paper 24479, University Library of Munich, Germany.
    17. Barry Eichengreen & Poonam Gupta, 2013. "Exports of services: Indian experience in perspective," Indian Growth and Development Review, Emerald Group Publishing Limited, vol. 6(1), pages 35-60, April.
    18. Rajeev Dehejia & Arvind Panagariya, 2016. "The Link between Manufacturing Growth and Accelerated Services Growth in India," Economic Development and Cultural Change, University of Chicago Press, vol. 64(2), pages 221-264.
    19. Kathuria, Vinish & Rajesh Raj, S.N. & Sen, Kunal, 2013. "The effects of economic reforms on manufacturing dualism: Evidence from India," Journal of Comparative Economics, Elsevier, vol. 41(4), pages 1240-1262.
    20. Felipe, Jesus & Kumar, Utsav & Abdon, Arnelyn, 2013. "Exports, capabilities, and industrial policy in India," Journal of Comparative Economics, Elsevier, vol. 41(3), pages 939-956.

    More about this item

    Keywords

    The Service Sector as India’s Road to Economic Growth?;

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ess:wpaper:id:2604. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Padma Prakash (email available below). General contact details of provider: http://www.esocialsciences.org .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.