—Till the decade of 1990s many studies raised
doubts about the sustainability of service-led growth in India.
Most often it was stated that growth in manufacturing is
required to give a boost to services, employment growth, income
generation, and trade balance. It is now increasingly being
realized that the resilience of the Indian economy is due to the
resilience of the services sector. Numerous studies since 2000s
have shown that services induced growth of GDP of India is
feasible. The service-led growth model is sustainable not only
from the economic perspective but from social and
environmental perspectives as well. To realize the maximum
potential from high growth of services India should make
investment in education, entrepreneurship, technology, modern
means of communication and transportation, and social
development. Policy reforms should be initiated to liberalise the
service sub-sectors like trade (retail and wholesale), financial
services, and software services that will help in faster growth
through attraction of FDI. So also, labour reforms are desirable
to take advantage of the demographic dividend.
—Foreign Direct Investment (FDI), India,
service sector, service sub-sectors, sustainable growth.
Bharti Singh is with Institute of Management Technology - CDL,
Ghaziabad, India (email: email@example.com;
Cite:Bharti Singh, "Is the Service-Led Growth of India Sustainable?," International Journal of Trade, Economics and Finance vol.3, no.4, pp. 316-322, 2012.