IDEAS home Printed from https://ideas.repec.org/p/ind/icrier/249.html
   My bibliography  Save this paper

The Service Sector as India's Road to Economic Growth?

Author

Listed:
  • Barry Eichengreen

    () (Indian Council for Research on International Economic Rela)

  • Poonam Gupta

    () (Indian Council for Research on International Economic Rela)

Abstract

Among fast growing developing countries, India is distinctive for the role of theservice sector. However, sceptics have raised doubts about both the quality andsustainability of the increase in service sector activity and its implications foreconomic development. Using National Accounts Statistics and cross-county data, weshow that the growth of services has been broad-based. We show that the growth ofservice sector employment is not simply disguised manufacturing activity. We alsofind that the skilled-unskilled mix of labour in the two sectors is becomingincreasingly similar. Hence, it is no longer obvious that manufacturing is the maindestination for the vast majority of Indian labour moving into the modern sector andthat modern services are only a viable destination for the highly skilled few. To theextent that the expansion of both modern manufacturing and modern services isconstrained by the availability of skilled labour, this just underscores the importancefor India of continuing to invest in labour skills. We conclude that sustainingeconomic growth and raising living standards will require shifting labour out ofagriculture into both manufacturing and services and not just into one or the other.

Suggested Citation

  • Barry Eichengreen & Poonam Gupta, "undated". "The Service Sector as India's Road to Economic Growth?," Indian Council for Research on International Economic Relations, New Delhi Working Papers 249, Indian Council for Research on International Economic Relations, New Delhi, India.
  • Handle: RePEc:ind:icrier:249
    as

    Download full text from publisher

    File URL: http://www.icrier.org/pdf/Working%20Paper%20249.pdf
    Download Restriction: no

    References listed on IDEAS

    as
    1. Panagariya, Arvind, 2011. "India: The Emerging Giant," OUP Catalogue, Oxford University Press, number 9780199751563.
    2. Devesh Kapur & Pratap Bhanu Mehta, 2004. "Indian Higher Education Reform: From Half-Baked Socialism to Half-Baked Capitalism," CID Working Papers 108, Center for International Development at Harvard University.
    3. Kochhar, Kalpana & Kumar, Utsav & Rajan, Raghuram & Subramanian, Arvind & Tokatlidis, Ioannis, 2006. "India's pattern of development: What happened, what follows?," Journal of Monetary Economics, Elsevier, vol. 53(5), pages 981-1019, July.
    4. J. Bradford Jensen & Lori G. Kletzer, 2005. "Tradable Services: Understanding the Scope and Impact of Services Outsourcing," Working Paper Series WP05-9, Peterson Institute for International Economics.
    5. Rashmi Banga & B.N.Goldar, 2004. "Contribution of services to output growth and productivity in Indian manufacturing: Pre and post reforms," Indian Council for Research on International Economic Relations, New Delhi Working Papers 139, Indian Council for Research on International Economic Relations, New Delhi, India.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Services; Growth; Structural change; India; Employment;

    JEL classification:

    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ind:icrier:249. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (G.K. Manjunath). General contact details of provider: http://edirc.repec.org/data/icriein.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.