SERVICE SECTOR IN INDIA: TRENDS, ISSUES AND CHALLENGES

Service sector is the lifeline for the social economic growth of a country .It is today the largest and fastest and growing sector globally output and employing more people than any other sector. This paper provides an overview of the Indian services sector. It identifies the various reasons for t he growth of service sector and the major barrier faced by the sector and provides policy recommendations which if implemented will lead to inclusive growth, increase productivity, and generate quality employment and increase trade and investment. It shows that services is the fastest growing sector in India, contributing significantly to GDP, GDP growth, employment, trade and investment. Labour productivity in services is the highest and it has increased overtime. India is a major proponent of liberalizing services both in the WTO and in its bilateral trade agreements. However, there are some concerns. Economic growth has slowed down. Growth in employment in services has not been commensurate with the share of the sector in GDP. A large part of the employme nt is in the noncorporate or unorganized sector, with limited job security. Although India is portrayed as a major exporter of services, its rank among WTO member countries in services exports is lower than that of China’s and its export competitiveness concentrate in few sectors and a few markets. The paper explain the over view of service sector in India, classification of service sector, growth and contribution of service sector identify the factors responsible for the new environment for the growth of service sector. Which is implemented, will lead to inclusive growth, increased productivity, generate quality employment, increase trade and investment, and enhances India’s global competitiveness in services.