Service Sector in India
The service sector in India is characterized by the asymmetrical relationship between income and employment generation. The increasing share of services in GDP (65%) and stagnant employment generated (28%) from the sector can have grave implications for the country where unemployment continues to be a major problem. The reasons for the asymmetrical relationship in income and employment generation, is embedded in the pattern of service sector growth experienced in the country. However the contribution of agriculture sector and manufacturing sector towards employment are 47 % and 25 % respectively. (Source: World Bank 2012). If this is compared with Hong Kong SAR China whose services contribution towards GDP highest at 93% employing 88 % of total employed, our service industry specificHRD policies need to be reworked.
Contribution of Services in Indian Employment
A reason often pointed out for the slow employment growth in Indian service sector is the high labour productivity and the income growth happening in certain sub sectors that uses skilled labour. This is in sharp contrast with other country experiences, where high growth rate of employment in services is explained with low productivity in services. However demand push factors only partly explain the service sector growth in India. Factors like unprecedented increase in government activities, demonstration effect creating demand pattern similar to those of high income countries, outsourcing of certain manufacturing activities to service sector, urbanization and trade facilitated by new technology act as pull factors for the growth of service sector.
Extent of disproportionality Between output and employment in service sector:
The extent of disproportionality between output and employment in service sector also differs between organised and unorganised activities. While in the organised service sector, income grew more than employment; the relationship is reverse in the unorganised sector. This happens in less developed countries where service sector grow not because of high- income demand, but due to unemployment. As every supply of labour creates its own employment in services, by sharing out a given amount of work and such a process cannot be considered as a sign of economic development. The little increase in service sector employment is often as a result of the proliferation of low paid jobs, especially in the large private unorganised sector within services. Even in the case of organised services employment opportunities is decreasing in those sectors where income growth is high, as in the case of finance, which is a matter of concern.
To cater to these trends there is a need to provide skilled manpower to the sectors. ITFT Education group provide Bachelor and Master Courses in Service Industry that will help in creating professionals as per industry demands thereby increasing the employment in this sector.
for more information visit Masters in Service Industry Management