Critical Issues in India's Service-Led Growth

Abstract: The paper identifies some of the critical issues in India’s service-led growth and provides policy insights with respect to them. The critical issues identified are: what explains growth of service sector in India; what are the reasons for lack of corresponding growth in employment in the service sector; can service sector sustain its growth; and what are the external and domestic constraints to trade in different services. An assessment of performance of services at the aggregated as well as the disaggregated level is undertaken in terms of their shares in GDP, employment, trade and FDI. In order to identify external and domestic constraints to trade, services have been categorised according to their extent of liberalisation, growth and share in trade. Finally, policy directions that emerge from the study are listed