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Chennai: India’s services-led growth has been geographically uneven but is expanding across regions. Unlocking the full potential of services employment will be central to achieving the vision of Viksit Bharat by 2047, where growth is matched by broad-based, high-quality jobs that sustain an inclusive and competitive economy, Niti Aayog.As of 2024–25, services contribute an estimated 55 per cent of India’s Gross Value Added (GVA), up from approximately 51 per cent in 2013–14.Karnataka, Telangana, Tamil Nadu, Kerala, and Maharashtra have emerged as major service-oriented economies, with services accounting for over half of their GSVA. These states benefit from urban centres, skilled workforce, and digital infrastructure, supporting growth in sectors such as IT, finance, real estate, and professional services. Delhi and Chandigarh have services shares exceeding 85 per cent. Several North-Eastern states, including Meghalaya, Manipur, Nagaland, and Arunachal Pradesh, have also recorded notable growth in services, while states such as Punjab, Haryana, Uttar Pradesh, West Bengal, Rajasthan, Andhra Pradesh, and Jharkhand show more moderate improvements.States and UTs with more developed service economies, such as Delhi, Chandigarh, Karnataka, Telangana, and Maharashtra, tend to record higher per capita incomes, supported by activities in IT, finance, and professional services. In several lower-income states, services also account for a significant share of GSVA, but are concentrated mainly in traditional sectors such as trade, repair, and public administration.Services also have an urban-led expansion, with over 60 per cent of urban workers employed in services compared to less than 20 per cent in rural areas. Only 10.5 per cent of rural women are engaged in services compared to 60 per cent of their urban counterparts. Women in rural services earn less than half of men’s wages.Employment growth is concentrated in traditional, low-value segments, while productivity and wage gains accrue in modern services that employ relatively few workers.Niti Aayog suggests formalisation and extension of social protection to self-employed, gig, and MSME workers to improve job quality. Women and rural youth should be enabled to access high-growth services through targeted skilling, digital infrastructure, and safe mobility. Investing in technology-led skilling will prepare workers for the twin transitions of digitalisation and the green economy. Balanced regional growth can be fostered by supporting service hubs in tier 2 and tier 3 cities and promoting state-level sectoral clusters.
