As per two new reports by NITI Aayog, India’s services sector is on the rise for job creation, with its total employment share rising from 26.9% in 2011–12 to 29.7% in 2023–24.
The two reports, titled “India’s Services Sector: Insights from Employment Trends and State-Level Dynamics” and “India’s Services Sector: Insights from GVA Trends and State-Level Dynamics,” focus on the many aspects, particularly when it comes to employment, of the services sector.
The reports highlighted how the services sector has added about 40 million jobs in the last years, bringing the total employment count to 188 million. This means that nearly every one in three workers in India is part of the services sector.
NITI Aayog highlighted that while sectors like trade, repair, and transport continue to be the biggest employers, newer areas such as finance, IT, and professional services are becoming more and more dominant as job providers. It stated that these modern job-providing areas are driving opportunities with better pay and growing global connections.
“Traditional sectors are primary employers, but modern services show most promise for growth,” the report explained.
While the services sector is growing more dominant in India as a job provider, it is still behind the global average of 50%. The report also highlighted the geographical disparity in the rise of different sectors.
In the southern and western states, modern services such as IT, finance, and business support are showcasing faster growth. Meanwhile, smaller states remain reliant on education, healthcare, and public administration for employment.
Furthermore, gross employment elasticity, a measure of how job growth responds to output growth, has also shown notable improvement. From 0.35 during the pandemic, it now stands at 0.63 in the post-pandemic period.
As per NITI Aayog, the findings of the two reports will contribute to the Viksit Bharat 2047 roadmap by helping states design strategies to expand growth within the services sector as well as create more jobs across different sectors.
