Understanding India’s Services Revolution

September 1, 2004

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Format: Chicago

Poonam Gupta, and James P. F. Gordon Understanding India’s Services Revolution, (USA: International Monetary Fund, 2004) accessed September 18, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

This paper analyzes the factors behind the recent growth of India's services sector. The high growth of services output in the 1990s was mostly due to the rapid expansion of communication, banking, business services (including the IT sector) and community services. While factors such as a high income elasticity of demand for services, increasing input usage of services by other sectors, and rising exports, were important in boosting services growth in the 1990s, supply side factors including reforms and technological advances also played significant roles. Going forward, the growth potential of Indian services exports is well known, but the paper also finds considerable scope for growth in the Indian service economy provided that deregulation continues. In addition, the paper shows that employment growth in the Indian services sector has been quite modest, thus underscoring the need for industry and agriculture to also grow rapidly.

Subject: Agricultural sector, Economic sectors, Employment, Income, Industrial sector, International trade, National accounts, Service exports, Services sector

Keywords: Agricultural sector, Balanced growth, Business services, Employment share, Global, Growth experience, Income, Income elasticity, Industrial sector, Input-output coefficient, Liberalization, Output share, Per-capita GDP, Sectoral share, Sectoral shares, Service exports, Services, Services activity, Services employment, Services export, Services growth, Services sector, Services subsector, Share of service, Share of services, Splintering, WP

Publication Details

Pages:

36
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2004/171
Stock No:

WPIEA1712004
ISBN:

9781451858532
ISSN:

1018-5941

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