Service Sector Employment Share Jumps to 29.7% Following 40 Million New Jobs: NITI Aayog

India’s services sector has created around 40 million jobs in the last six years, with its share in total employment rising from 26.9% in 2011-12 to 29.7% in 2023-24, according to NITI Aayog. The total number of people employed in the sector now stands at about 188 million.

Employment and Sector Overview

The findings were shared in two reports, “India’s Services Sector: Insights from Employment Trends and State-Level Dynamics” and “India’s Services Sector: Insights from GVA Trends and State-Level Dynamics.” The reports said the services sector has remained a major source of employment growth in India and has supported recovery after the pandemic.

Comparison with Global Average

The reports noted that around 30% of India’s workforce is employed in the services sector, lower than the global average of 50%. This indicates a slower transition of workers from agriculture and manufacturing towards services compared to other countries.

Sector Composition

Employment within the services sector is led by trade, repair, and transport, which continue to employ a large part of the workforce. Meanwhile, finance, IT, and professional services are emerging as growing areas of employment. These modern services have been expanding with higher levels of formalisation and urban concentration.

Regional Differences

NITI Aayog’s findings show uneven growth across states. Southern and western states such as Karnataka, Maharashtra, and Tamil Nadu have seen faster job creation in areas like IT and finance. In contrast, smaller states depend more on education, healthcare, and public administration for employment.

Employment Elasticity and Future Focus

Employment elasticity, which measures how job growth relates to output growth, improved from 0.35 before the pandemic to 0.63 afterwards. NITI Aayog said the data would help in framing strategies under the Viksit Bharat 2047 roadmap to expand service-led employment.

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Conclusion

The services sector continues to play an important role in India’s employment base, adding new jobs steadily over the past decade, though its share still remains below the global average.

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