‘Services Sector’ becomes the biggest ‘job creator’
A big and very important news has come on the employment front in the country. Government of India’s think-tank NITI Aayog has released a detailed report on Tuesday, according to which in the last 6 years, India’s ‘services sector’ alone has created 4 crore (40 million) new jobs. The report makes it clear that this sector has now emerged as the biggest ‘job creator’ of the country.
Even Corona could not stop the pace of ‘service sector’
The NITI Aayog report, titled “India’s Services Sector: Insights from Employment Trends and State-Level Dynamics”, brings out several interesting facts. According to the report, today about 18.8 crore (188 million) people in India are directly employed in the service sector. This sector not only contributes more than half (about 55%) to the country’s total economy (GVA), but it also maintained its strength during a severe crisis like the Covid-19 pandemic.
An important aspect of the report is the increase in ‘Employment Elasticity’. If understood in simple language, it means that now in proportion to the growth in the economy, more jobs are being created than ever before. After Corona, this figure has increased from 0.35 to 0.63, which is second after the construction sector. This is a very positive sign that economic development is now reaching more people in the form of employment.
Jobs and facilities are missing
Despite these impressive figures, NITI Aayog has also pointed out a big paradox, which is directly related to the life of the common man and the quality of his job. The report warns that despite nearly one-third of India’s workforce being in the services sector, most jobs are trapped in traditional and low-productivity segments.
A large number of people are working in sectors like retail trade and transport, but ‘informality’ and ‘vulnerability’ dominate here. That is, these jobs often lack fixed salary, social security (like PF, insurance) or job guarantee.
On the other hand, there are high-value services such as IT, finance, healthcare and professional services, which generate tremendous economic value and increase the country’s GVA, but employ (comparatively) fewer people. The Commission has clearly stated that if these ‘structural reforms’ are not addressed, the country may get trapped in a vicious cycle of expansion of low-quality jobs.
Big cities ahead, women and villages behind
The report raises serious questions not only on the quality of jobs but also on their accessibility. These are three main challenges. First, the poor quality of jobs. The second challenge is the deep gender and spatial divides. That is, it is still a difficult task for women and rural youth to reach good and high paying opportunities in this sector.
The third challenge is regional inequality. This becomes clear in NITI Aayog’s second report “India’s Services Sector: Insights from GVA Trends”. In the states and union territories where the service economy is more developed, like Delhi, Chandigarh, Karnataka, Telangana and Maharashtra, the per capita income is also quite high.