India’s forgotten promise of services-led growt
By: Nayyar, Gaurav
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Material type: 
BookPublisher: The Indian Journal of Labour Economies Description: 68(3), Jul-Sep, 2025: p.711-731.Subject(s): Structural transformation, Services sector, Growth, India
In:
The Indian Journal of Labour EconomiesSummary: The rapid growth of India services sector is much cited in the discussion on growth and structural transformation. However, India’s services-led structural transformation presents a dichotomy. Knowledge-intensive services (comprising finance, information and communication technology [ICT], and business services), which have contributed to productivity growth, have typically been intensive in skilled labour. On the other hand, low-skilled services, such as retail, have absorbed labour but have shown little productivity growth. This dichotomy conceals more than it reveals. For one, India’s exports of knowledge-intensive services have supported jobs and incomes more than exports of manufactured goods. This export-led growth has also had spillover benefits in terms of supporting jobs in other sectors as well as through increasing education enrollment rates. Furthermore, there are opportunities to raise productivity among low-skilled services through the diffusion of digital technologies, new business models, and trade. Last, but not least, strengthening the linkages between the services and manufacturing sectors can boost economy-wide growth and job creation. These findings present a case for reclaiming India’s forgotten promise of services-led growth as part of a broader multi-sectoral development process.- Reproduced
https://link.springer.com/article/10.1007/s41027-025-00588-8
| Item type | Current location | Call number | Vol info | Status | Date due | Barcode |
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Articles
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Indian Institute of Public Administration | 68(3), Jul-Sep, 2025: p.711-731 | Available | AR138029 |
The rapid growth of India services sector is much cited in the discussion on growth and structural transformation. However, India’s services-led structural transformation presents a dichotomy. Knowledge-intensive services (comprising finance, information and communication technology [ICT], and business services), which have contributed to productivity growth, have typically been intensive in skilled labour. On the other hand, low-skilled services, such as retail, have absorbed labour but have shown little productivity growth. This dichotomy conceals more than it reveals. For one, India’s exports of knowledge-intensive services have supported jobs and incomes more than exports of manufactured goods. This export-led growth has also had spillover benefits in terms of supporting jobs in other sectors as well as through increasing education enrollment rates. Furthermore, there are opportunities to raise productivity among low-skilled services through the diffusion of digital technologies, new business models, and trade. Last, but not least, strengthening the linkages between the services and manufacturing sectors can boost economy-wide growth and job creation. These findings present a case for reclaiming India’s forgotten promise of services-led growth as part of a broader multi-sectoral development process.- Reproduced
https://link.springer.com/article/10.1007/s41027-025-00588-8
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