Services: growth, challenges, policy

Services — trade, transport, finance, communications, IT, education, health, tourism — now dominate India's output and exports, a pattern driven by domestic demand, global outsourcing and the IT revolution. Services growth has been skill-intensive in its leading segments, raising questions about job creation for less-skilled workers. Worked example: if services are 55% of output but only 30% of employment, services labour productivity is 55/30 = 1.83 times the economy average, while the rest of the economy is at 45/70 = 0.64 — a wide productivity gap that mirrors agriculture's.