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The Service Sector in India's Development

The Service Sector in India's Development (Hardback)

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A striking aspect of India's recent growth has been the dynamism of its services sector. In 2010, it accounted for 57 percent of the country's GDP and 25 percent of its total employment. The results do not conform to the growth experience of currently industrialized countries or other developing economies. Is the increasing share of the service sector in India's total output simply notional, as several activities that were earlier classified in the industrial sector are now subsumed in services' value added, or because the relative price of services has increased over time? No. The sector's growth is real - it is linked to household final demand, policy reforms and increased service exports. Is this service-led growth process sustainable? That remains an open question because the service sector is highly heterogeneous, ranging from software services and business process outsourcing to wholesale and retail trade and personal services. These subsectors vary considerably in the context of different economic characteristics that are important for development.

Gaurav Nayyar is an Economist in the Economic Research Division of the World Trade Organization, Geneva, Switzerland. Previously, he was a College Lecturer at St Catherine's College, University of Oxford. He obtained a D.Phil. in Economics from the University of Oxford, where he was a Dorothy Hodgkin Scholar. Dr Nayyar's research interests lie primarily in the area of development economics, and he has published in academic journals on issues relating to the service sector, economic growth and poverty reduction. He was a co-author of the 2010 World Trade Report Trade on Natural Resources and the 2011 World Trade Report on Preferential Trade Agreements.

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