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The Service Sector in India

Author

Listed:
  • Mukherjee, Arpita

    (Indian Council for Research on International Economic Relations Relations)

Abstract

The service sector is the largest and fastest growing sector in India and has the highest labor productivity, but employment has not kept pace with the share of the sector in gross domestic product and has not produced the number or quality of jobs needed. There is no policy leading to inclusive growth, and multiple, uncoordinated governing bodies adversely affect the growth of the sector. Many regulations are outdated, and there are restrictions and barriers on foreign direct investment. While India is among the top 10 World Trade Organization members in service exports and imports, the growth and export of services is less than that of the People’s Republic of China, and exports are competitive in only a few services and are concentrated in a few markets. Most of the poor in India do not have access to basic services such as healthcare and education, and infrastructure is weak so the cost of service delivery is high. Although India wants to be a knowledge hub, there is no uniformity in the quality and standards of education, and formal education does not guarantee employability. Policy measures are suggested for inclusive growth that will also enhance India’s global competitiveness in services.

Suggested Citation

  • Mukherjee, Arpita, 2013. "The Service Sector in India," ADB Economics Working Paper Series 352, Asian Development Bank.
    • Handle: RePEc:ris:adbewp:0352
    Note: http://www.adb.org/sites/default/files/pub/2013/ewp-352.pdf
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    File URL: https://www.adb.org/publications/service-sector-india
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    Citations

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    Cited by:

    1. Arup Mitra, 2022. "Does Services Sector Encourage Migration and Reduce Poverty?," The Indian Journal of Labour Economics, Springer;The Indian Society of Labour Economics (ISLE), vol. 65(1), pages 1-18, March.
    2. Kelvin Mulungu & John N. Ng’ombe, 2017. "Sources of Economic Growth in Zambia, 1970–2013: A Growth Accounting Approach," Economies, MDPI, vol. 5(2), pages 1-23, May.
    3. Rashid Amjad & Namra Awais, 2016. "Pakistan’s Productivity Performance and TFP Trends, 1980–2015: Cause for Real Concern," Lahore Journal of Economics, Department of Economics, The Lahore School of Economics, vol. 21(Special E), pages 33-63, September.
    4. Daqing Yao & John Whalley, 2016. "Global Service Efficiency and the Role of Special and Differential Based Negotiation," NBER Working Papers 22362, National Bureau of Economic Research, Inc.
    5. Padhi, Balakrushna & Sharma, Himja, 2023. "Changing Contours of Growth and Employment in the Indian Labour Market: A Sectoral Decomposition Approach," Structural Change and Economic Dynamics, Elsevier, vol. 67(C), pages 220-233.
    6. Prabhjot Kaur, 2020. "Role Stress and Affective Commitment: Mediator Analysis of Employee Satisfaction," Vision, , vol. 24(4), pages 471-480, December.
    7. Popli, Manish & Raithatha, Mehul & Fuad, Mohammad, 2021. "Impact of institutional imprinting on the persistence of superior profits: A study of regulatory punctuation in India," Journal of Business Research, Elsevier, vol. 124(C), pages 223-235.
    8. Arup Mitra, 2020. "Services Sector in India: Does It Contribute to Population Movement and Poverty Reduction?," IEG Working Papers 401, Institute of Economic Growth.
    9. Nitin Gupta & Prem Vrat & Ravindra Ojha, 2023. "People Quality Measurement in Service Industry: A New Approach," Metamorphosis: A Journal of Management Research, , vol. 22(1), pages 55-72, June.

    More about this item

    Keywords

    services; growth; employment; productivity; India;
    All these keywords.

    JEL classification:

    • L80 - Industrial Organization - - Industry Studies: Services - - - General
    • L88 - Industrial Organization - - Industry Studies: Services - - - Government Policy
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

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