India’s Services Sector Employs Nearly 30% Of Workforce, Yet Trails Global Average Of 50%: NITI Aayog

ENA Economy 2025-10-28 16:30:00 New Delhi, Oct 28 (KNN) According to NITI Aayog, Indias services sector employs nearly 30 percent of the countrys workforce, or about 188 million people. In 2023 24, the sectors generating the highest employment were trade, transport, education, travel, and professional services. Services employment rose to 29.7 percent in 2023 24 compared to 26.9 percent in 2011 12, with 40 million jobs created in the last six years, NITI Aayog said in its reports. The two reports — Indias Services Sector: Insights from Employment Trends and State-Level Dynamics and Indias Services Sector: Insights from GVA Trends and State-Level Dynamics — were launched on Tuesday by B.V.R. Subrahmanyam, CEO, NITI Aayog. The first report focuses on employment dynamics within the services sector, offering a multidimensional view of Indias workforce across sub-sectors, regions, gender, education, and occupations. It observed that despite the rise in employment in the services sector, the share still trails the global average of 50 percent, indicating a slower structural transition. The report recommended a series of measures to accelerate this shift, including structural reforms, faster implementation of social protection schemes, digitisation of informal worker registration, and the formalisation of care services to promote formal employment in the sector. It proposes a four-part policy roadmap focusing on formalisation and social protection for gig and MSME workers, targeted skilling and digital inclusion for women and rural youth, investment in green and emerging sectors, and balanced regional development through service hubs in Tier-2 and Tier-3 cities. The report highlights the sectors dual nature — modern, high-productivity segments with limited employment intensity, and traditional, informal segments that absorb large numbers of workers but offer lower wages. While services continue to anchor Indias post-pandemic employment recovery, employment generation remains uneven across sub-sectors, informality is widespread, and job quality continues to lag behind output growth, the report said. Gender gaps, rural urban divides, and regional disparities underscore the need for an employment strategy that integrates formalisation, inclusion, and productivity enhancement at its core, it added. The second report examines national and state-level patterns of services-led growth, assessing whether states with lower initial shares in services are catching up with more advanced regions — a key indicator of balanced regional development. While inter-state disparities in services sector output have modestly widened, structurally lagging states are showing signs of convergence, it said — suggesting that Indias services-led growth is becoming more broad-based and spatially inclusive. The services sector currently contributes nearly 55 percent to Indias Gross Value Added (GVA) in 2024 25, up from 51 percent in 2013 14, underscoring its central role in the economy. The report recommends strengthening digital infrastructure, logistics, innovation, finance, and skilling to enhance diversification and competitiveness. At the state level, it calls for tailored service strategies aligned with local strengths, better institutional capacity, and development of regional service clusters. The reports seek to outline strategic pathways for states and industries to drive the next phase of services-led growth by fostering innovation, deepening digital integration, and developing a skilled workforce. (KNN Bureau) 43905 https://knnindia.co.in/news/newsdetails/economy/indias-services-sector-employs-nearly-30-of-workforce-yet-trails-global-average-of-50-niti-aayog 2025-10-28 16:30:00 knnindia.co.in India’s Services Sector Employs Nearly 30% Of Workforce, Yet Trails Global Average Of 50%: NITI Aayog