NITI Aayog Charts 40 Million Job Gains And Roadmap For Employment-Intensive Services Growth
SDG 8: Decent Work & Economic Growth | SDG 10: Reduced Inequalities
Institutions: NITI Aayog | Ministry of Statistics and Programme Implementation
NITI Aayog’s new report “India’s Services Sector: Insights from Employment Trends and State-Level Dynamics” shows that India’s services sector employed ≈ 188 million workers in 2023–24, adding nearly 40 million jobs in six years and emerging as the second-largest source of employment after agriculture. While the sector now contributes over 50 % of India’s GVA, it accounts for less than one-third of total employment, revealing a persistent output–jobs gap.
The study builds on NITI Aayog’s accompanying GVA Trends and State-Level Dynamics report (October 2025), which maps how services are driving state-wise value creation. Together, the two analyses identify a dual policy challenge, maintaining high-value growth while deepening employment intensity, as India advances toward a services-led economy.
The report notes that employment elasticity in services rose to 0.63 post-COVID, second only to construction (0.60), underscoring its role as a labour-shock absorber. Yet, informality remains high (≈ 87 %), and gender gaps persist: only 10.5 % of rural women work in services compared with 60 % of urban women.
Regionally, Maharashtra, Tamil Nadu, Karnataka and Telangana dominate high-productivity “modern” services such as IT, finance and health, while Bihar and Madhya Pradesh remain concentrated in lower-value trade and transport. The report also highlights that 61 % of urban workers are employed in services, reflecting growing urban concentration and rural–urban segmentation.
The study proposes a four-pillar roadmap: (1) formalisation and social protection for self-employed and gig workers; (2) targeted skilling and mobility support for women and rural youth; (3) investment in digital and green skills; and (4) creation of Tier-2/3 service hubs to rebalance growth.
Together with the earlier GVA report, it frames services as a core employment and productivity strategy for Viksit Bharat @ 2047, demanding coordinated labour-market, digital-infrastructure and state-planning action.
What is Employment Elasticity? → Employment elasticity measures how responsive job creation is to economic growth — the percentage change in employment for a 1 % change in output or GVA. A higher elasticity means growth yields more jobs per unit of output. India’s services sector recorded an average elasticity of 0.43 (2011–24), rising to 0.63 post-COVID, underscoring its central role in employment recovery.
What is GVA? → Gross Value Added (GVA) measures the value of goods and services produced in an economy minus the cost of inputs and raw materials used. It reflects the real contribution of each sector—agriculture, industry, or services—to overall output. GVA is a core indicator used by MoSPI and NITI Aayog to track growth, productivity and structural shifts within the economy.
Follow the full report here:
India’s Services Sector: Insights from Employment Trends and State-Level Dynamics – NITI Aayog (Oct 2025)