Title: Services Sector Led Sustainable Growth: Some Insights from 66th Round of NSSO
Abstract: Most of the developed countries show a consistent pattern of growth with workforce and resources shifting from agricultural sector to industrial sector and finally to services sector at higher levels of development. The Services sector is the largest contributor to employment and national product in all the developed countries. In many developing countries Services sector has emerged as the largest sector in terms of its share in domestic product at low levels of industrial development and per capita income. It is therefore now considered the new engine of growth and sustainable development for the emerging Asian economies. In India, post liberalization, the Services Sector has grown at fast pace and has emerged as the biggest sector of the economy in terms of its contribution to the gross domestic product. However, its share in labour force lags far behind. Currently, more than 50% of workforce is engaged in primary activities. This apparent dispropotionality in share of Services Sector in domestic product and labour force raises the question about the sustainability of such a development pattern. Sustainable economic growth in the long run needs to be accompanied by displacement of surplus labour from primary sector to industrial and services sector. But with slow growth of manufacturing sector and low labour absorption capacity, enhancing the employment potential in Services sector seems the most plausible alternative. The objective of this paper is to explore the current state of employment in Services Sector and its various subsectors using the latest NSSO (66th round) data. This study further attempts to examine the heterogeneity in labour share of services sector across major Indian States. The statistical analysis of data reveals that there are considerable variations, interstate as well as intra-sector, in the share of Services Sector in labour force .In most of the Indian states, Services Sector has not managed to emerge as the largest sector in terms of labour share. Primary sector has continued to be the largest sector in almost all the states with the exception of Kerela, however Services Sector is the second largest employer of labour force. Further, it is also observed across the data set of 20 major Indian states that the wholesale and retail trade subsector of services sector employed maximum labour force, followed by Transport and storage subsector. On the other hand financial services, health services and social services sub sectors have the least labour share across states.
Publication Year: 2014
Publication Date: 2014-02-08
Language: en
Type: article
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