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Sustainability of Service-led Growth in India - Coggle Diagram
Sustainability of Service-led Growth in India
India's service sector
Mostly dependent on external demand
India’s integration with international markets
Outperformed other sectors of the Indian economy
Historical Background
1996-97: sharp increase in the share of services in GDP
2013-14: India has the second fastest growing service sector
1991: LPG reforms
Government Initiatives
Start Up India, Stand Up India, Digital India, Skill India
Identification of Champion sectors
Make in India program
Tourism: Swadesh Darshan and PRASAD Schemes
Issues with Service Sector
Tertiarization of Indian economy
Manufacturing hurdles
Lack of skilled human capital
Outsourcing/splintering
Economic reforms
Income elasticity of services demand
Why service-led growth is sustainable in long run?
Social and environmental sustainability
Decrease in poverty
Services induced growth is feasible
Less capital required
Resilience to Indian economy
Growing activities in tourism, ITeS, healthcare
Attracted the highest amount of FDI inflows
Issues
IT and Financial services are not employment intensive
Agriculture is the yet biggest employing sector
Manufacturing sector did not become the engine of growth
Employment lower than the world average
Way Forward
Expansion of MSME and Rural Non Farm Economy
Livelihood creation
Fostering entrepreneurship
Education system needs to be revamped to create the desired skill-sets
Undertake the overdue labour reforms and develop human skills
Job Intensive sectors like Food Processing Should be promoted.
Financing job-intensive sectors