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A striking aspect of India's recent growth has been the dynamism of its services sector. In 2010, it accounted for 57 percent of the country's GDP and 25 percent of its total employment. The results do not conform to the growth experience of currently industrialized countries or other developing economies. Is the increasing share of the service sector in India's total output simply notional, as several activities that were earlier classified in the industrial sector are now subsumed in services' value added, or because the relative price of services has increased over time? No. The sector's...

A striking aspect of India's recent growth has been the dynamism of its services sector. In 2010, it accounted for 57 percent of the country's GDP and 25 percent of its total employment. The results do not conform to the growth experience of currently industrialized countries or other developing economies. Is the increasing share of the service sector in India's total output simply notional, as several activities that were earlier classified in the industrial sector are now subsumed in services' value added, or because the relative price of services has increased over time? No. The sector's...

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