Question

Discuss the role of service sector in terms of the Share in Employment.

Answer 1

1. Growth in Employment Share: In India, for example, the share of the service sector in employment has increased from about 17% in 1950-51 to around 32-33% in 2018-19. This shows a marked growth in the sector's capacity to generate employment over the years.
2. Diverse Employment Opportunities: The service sector employs two sets of people:
   • Those directly linked to services like transport, storage, communication, banking, and business activities.
   • Professionals who are not directly involved in the production of goods, such as teachers, doctors, lawyers, accountants, technical persons, and IT/software professionals.
3. Importance of Service Sector Employment: The sector absorbs a significant share of the workforce, offering jobs in both skilled and semi-skilled categories. It helps in providing employment opportunities to various segments of society, including urban and rural populations, through diverse services.
4. Complementary Role: The service sector supports employment indirectly by facilitating the primary (agriculture) and secondary (industry) sectors. For example, transport and banking services aid the primary and secondary sectors to grow, which also contributes to more employment overall.
5. Economic Development Link: An increase in service sector employment is often associated with economic development and higher standards of living, reflecting a shift from agrarian to service-based economies.
6. Quantitative Contribution: In India, the sector employs about one-third (approximately 33%) of the labor force as of recent data. This is a substantial portion, illustrating the sector's role in job creation.