NITI Aayog released two reports on India’s Services Sector | Current Affairs | Vision IAS
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In Summary

The reports highlight sector’s employment, its slow service industry growth, employment disparities, informal workforce, and a need for formalization, skilling, and regional growth for inclusive progress.

In Summary

The reports are titled as Insights from GVA trends and State-level dynamics and Insightsfrom Employment trends and State-level dynamics.

Key Highlights of the Reports

Services at the Core of India’s Employment Transition

  • It employed 188 million workers in 2023–24, and is the second-largest employer.
  • In 2024–25, the services sector contributed nearly 55% of Gross Value Added (GVA), while the primary and secondary sectors accounted for 16% and 29%, respectively.
    • Despite a high contribution to GVA, it provided less than one-third of total jobs (mostly informal and low-paying).

Employment Landscape

  • Added ~40 million jobs in six years, second only to construction.
  • Acts as a labour shock absorber, but is divided between:
    • High-value services (IT, finance, healthcare, professional services), productive but limited employment.
    • Traditional services (trade, transport), major employers, yet highly informal.
  • India’s shift to services remains slower than its peers.

Employment Profile

  • Spatial: 60% of urban workers, as compared to less than 20% of rural workers in services.
  • Gender: Only 10.5% of rural women are in services as compared to 60% of urban women; persistent wage gaps.
  • Age: Dominated by prime-age workers; youth face instability.
  • Education: Higher education improves job access, but informality persists.
  • Informality: 87% lack social security; rural women earn less than 50% of men’s wages.

Roadmap for Transformation

  • Formalisation and social protection for informal, gig, and MSME workers.
  • Inclusive access for women and rural youth via skilling and digital tools.
  • Tech-led skilling for digital and green jobs.
  • Balanced regional growth through Tier-2/3 service hubs and state clusters.
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