Reality of productivity and inclusiveness of services sector growth in India

The objective of this paper is to overview the services sector growth in India. Service sector is the largest contributor of GDP in the Indian economy with the highest labour productivity, however its employment elasticity is the lower than manufacturing sector. A larger part of employment in services sector is in unorganized sector with low social security. This is the main cause of concern. Service sector has started to grow in the early decades but its pace accelerated after the LPG reforms. India's services sector has grown rapidly in the last decade (2014–2015) with almost 72% of the growth in india's GDP is coming from this sector. Unlike other developing economies the Indian growth story has been led by services sector growth which is now in double digit. This sector is the largest receiver of FDI. On trade front, however india is considered as a major exporter of services, its export competitiveness is concentrated in a few sectors and in a few markets. The main thurst of India in multilateral and bilateral trade agrrements is inclusion of services in these agreements. So that it can reap the comparative advantage of trade in services. Focus of this paper is to identify the measures which can stimulate the productivity and inclusiveness of the services sector in India.