The Structural Transformation of the Indian Economy- With Special Reference to the Service Sector

This review article provides an overview of literature on the structural shift in the economy from primary and secondary sector towards the tertiary sector. We attempt to revisit the developments of the tertiary sector and its implications on the Indian economy as a whole. While analyzing the structural transformation, which refers to the streamlining of economic activity across the broad sectors of the economy agriculture, manufacturing and services, we investigate the relation between the increasing contribution of the service sector towards GDP and employment growth. Findings in the literature show that India has witnessed a significant structural transformation; there is a shift from the primary sector to the tertiary sector. The service sector is playing a dominant role and its contribution to the economy is increasing continuously. However, it is also seen that this growth does not lead to employment growth, which has been termed by authors as jobless growth. We have also highlighted various productivity measurement models and measurement issues, due to which we believe that the contribution of the service sector is far less represented