Changing Paradigms of Service Sector Employment in India

Services’ represent a heterogeneous group of activities and has now become a prominent sector in the economies of most developed and developing countries, in terms of its contribution to national income, trade flows and foreign direct investment. The case of India is also not very different, although the recent euphoria is created by increasing tradability caused by the changing nature of services, invention of technology, and opportunities opened by General Agreement on Trade in Services. The service sector in India is characterized by the asymmetrical relationship between income and employment generation. The increasing share of services in GDP (54.1%) and stagnant employment generated (24%) from the sector can have grave implications for the country where unemployment continues to be a major problem. The reasons for the asymmetrical relationship in income and employment generation, is embedded in the pattern of service sector growth experienced in the country