An Empirical Analysis of Growth and Structure of Service Sector in India

Economic development has been associated with structural changes in the national economies. On the path of its economic development, India has reached a level where there is predominance of service sector and it has become the mainstay of the growth process especially over the last ten years. Uniqueness and sudden growthpattern of service sector of India needs to be recognised, understood and analysed with its implications for long term development strategy and policy. It is against this backdrop, that the present study has been designed. It is an attempt to study the trends and implications of sectoral growth with special reference to service sector in India. The analysis brings out the fact that in comparison to the world scenario, growth of service sector in India is not so pronounced. The study has found that except for the service sector hardly any significant change can be identified in the growth performances of the other two sectors in the post-reforms period. A striking feature of India's development is that growth in Indian service sector is not accompanied by additional employment opportunities, which have brought structural imbalances. The results reveal trade hotel, transport and communication as one of the most contributing sector of service sector to GDP. The study emphasised that the services sector is one of the areas, where India needs to focus on sharply to increase its share in the global services trade. However, it is imperative that the industrial and agricultural sectors also grow rapidly but unfortunately till now; the relatively jobless nature of growth in India's services sector underscores this need.