India's Services Sector: A Powerhouse in Job Creation and Economic Growth

The latest reports from NITI Aayog highlight the increasing significance of India's services sector in job creation. According to these reports, the sector's employment share rose from 26.9% in 2011-12 to 29.7% in 2023-24, marking India's leap towards becoming a developed nation.

Identified as "India's Services Sector: Insights from Employment Trends and State-Level Dynamics" and "Insights from GVA Trends and State Level Dynamics," the reports reveal that nearly 40 million jobs have been added in six years, elevating total employment in this sector to 188 million, or nearly 30% of the overall workforce. However, this figure still lags behind the global average of 50%, indicating a gradual structural transition.

Notably, gross employment elasticity, a focus of the reports, shows significant improvement, climbing from 0.35 pre-COVID to 0.63 post-pandemic. While traditional services like trade and transport dominate employment, modern sectors such as IT, finance, and professional services hold the most promise for future growth due to competitive wages and global connectivity. Regional disparities remain, with southern and western states leading in modern services employment, whereas smaller states depend more on education and public administration for job creation. These insights will be instrumental in shaping the Viksit Bharat 2047 roadmap to drive service-led growth and employment across India.