Is the Service-Led Growth of India Sustainable?

Abstract

the share of primary sector to GDP has decreased from 56% to 22% whereas the share of service sector has increased from 28% to 54%. The fall in the share of the primary sector has taken 40 years that was achieved by the developed countries in 100 to 150 years and the services sector has grown at a rapid rate since 1990s (2). The share of secondary sector has increased at a slow pace from 16% in the decade of 1950s to only 24% in 2000s. In the decade of 2000s the share of primary, secondary and service sector were 22%, 24% and 54% respectively. The stage of industrialization has been by-passed by the Indian economy with the services sector showing a phenomenal growth since the post- liberalisation period. Service-led growth in India has forced the economists to re-think about the pattern of structural shift that a country should experience as it embarks upon the path of economic development.