Service-led Growth in India: An Enigma to Inclusiveness

Abstract

Stable high growth in the service sector has made India free from the stigma of slow and steady ‘Hindu rate of growth’ of about 3.5% per annum during the first three decades of independence. Service-led growth has placed India among the top performing giant economies in the world. India is now a 3 trillion USD (United States Dollar) economy in terms of Nominal GDP (IMF, 2020). Under this milieu, the chapter aims to examine whether the growth in the service sector in India is inclusive or not. The observations of the study have shown that the service sector has been growing at fast pace compared to the other two sectors, which makes the system into jobless status. The sectoral contribution of service sector to the GDP is increasing after the new economic reform of 1990, but the employment contribution is going down. So the country is now in the grip of ‘jobless’ growth, and the grip is strengthening because of some structural issues such as changes in consumers’ demand with rising per capita income. Further deepening of finance capital in the savings sphere of service sector has made the wide disconnect between the real economic activity and growth of finance capital. Revival of high linkage sectors with higher potential for employment growth, such as agriculture and manufacturing, can be game changer towards the goal of inclusiveness.

Citation

Saha, A.K. and Biswas, S. (2023), "Service-led Growth in India: An Enigma to Inclusiveness", Das, R.C. (Ed.) Inclusive Developments Through Socio-economic Indicators: New Theoretical and Empirical Insights, Emerald Publishing Limited, Leeds, pp. 217-230. https://doi.org/10.1108/978-1-80455-554-520231018