New Delhi, Oct 28 (NationPress) According to a report by NITI Aayog, the services-led growth in India's economy is increasingly becoming more regionally balanced. States with initially lower contributions to the services sector are now catching up with their more developed counterparts.

“There's compelling evidence that structurally lagging states are beginning to converge with advanced ones. This emerging trend indicates that India's transformation driven by the services sector is progressively becoming more broad-based and spatially inclusive,” the report notes.

The services sector has emerged as the backbone of India's economic advancement, accounting for nearly 55 percent of the national GVA (Gross Value Added) for the fiscal year 2024-25.

To guide policy initiatives, the report presents a quadrant-based framework categorizing 15 major service sub-sectors into four distinct categories: Engines of Growth, Emerging Stars, Mature Giants, and Struggling Segments. This classification aims to support targeted strategies across various states.

The recommendations emphasize the importance of prioritizing digital infrastructure, logistics, innovation, finance, and skilling to enhance diversification and competitiveness within the sector.

Moreover, at the state level, it is essential to formulate customized service strategies that leverage local strengths, bolster institutional capacity, integrate services with industrial ecosystems, and promote urban and regional service clusters.

Collectively, these insights provide a strategic policy roadmap for establishing the services sector as a pivotal growth engine across India, reinforcing its crucial role in the vision of Viksit Bharat @2047.

A supplemental report titled India's Services Sector: Insights from Employment Trends and State-Level Dynamics focuses on employment within the services domain, utilizing data from the NSS (2011-12) and PLFS (2017-18 to 2023-24).

This report presents a comprehensive and multi-faceted view of India's services workforce across sub-sectors, gender, regions, education, and occupations. It explores beyond mere aggregate trends to uncover the sector's dual nature: modern, high-productivity segments that are globally competitive yet limited in employment intensity, and traditional segments that accommodate significant numbers of workers but primarily remain informal and low-paying.

By correlating historical and contemporary data, it situates these trends within a larger framework of structural transformation, offering a cohesive understanding of the opportunities and divides that influence India's services-led employment transition.

Findings indicate that while the services sector remains a cornerstone for India's employment growth and post-pandemic recovery, challenges are still prevalent. Employment generation varies across sub-sectors, informality is widespread, and job quality continues to lag behind output growth. Gender disparities, rural-urban divides, and regional inequalities highlight the need for an employment strategy that encompasses formalization, inclusion, and productivity enhancement.

To address these challenges, the report outlines a four-part policy roadmap focusing on the formalization and social protection of gig, self-employed, and MSME workers; targeted skilling and digital access to broaden opportunities for women and rural youth; investment in emerging and green economy skills; and balanced regional development through service hubs in Tier-2 and Tier-3 cities.

By positioning the services sector as a dedicated driver of high-quality and inclusive jobs, the report emphasizes its significance in India's employment transition and its critical role in achieving the vision of Viksit Bharat @2047.

The report stresses the necessity to enhance digital infrastructure, expand skilled human capital, cultivate innovation ecosystems, and integrate services across value chains, positioning India as a reliable global leader in digital, professional, and knowledge-based services.