INSIGHTS FROM EMPLOYMENTTRENDS AND STATELEVEL DYNAMICSINSIGHTS FROM EMPLOYMENTTRENDS AND STATELEVEL DYNAMICS INDIA’S SERVICES SECTOR INSIGHTS FROM EMPLOYMENT TRENDSAND STATE LEVEL DYNAMICS Services Division Team Dr. Sonia Pant(Programme Director)Mr. Deepak Kumar(Deputy Secretary)Ms. Pratibha Sharma(Deputy Director)Ms. Anisha Sawhney(Young Professional) Suggested Citation NITI Aayog. (2025).India’s Services Sector: Insights from Employment trends and State-leveldynamics.October 2025 Copyright and Disclaimer Copyright © NITI Aayog, 2025 Everycare has been taken to provide correct and up-to-date information with references.However, NITI Aayog shall not be liable for any loss or damage whatsoever, including incidental orconsequential loss or damage, arising out of, or in connection with, any use of or reliance on theinformation contained in this document. Readers should note that this document may be subjectto revisions. Foreword by VC Messageby PD Contents 1. Introduction........................................................................................................................................................4 2.1 Global employment shifts towards services.................................................................................................................... 82.2 Comparative employment elasticity across countries........................................................................................... 9 3. Aggregate trends and elasticity in services......................................................................................... 14 3.1 Growth in employment: Share and Numbers................................................................................................................153.2 Elasticity of employment: Sectoral insights....................................................................................................................16 4. Understanding employment in India’s services:workers, workplaces and conditions……….................................................................................................20 4.1 Spatial Distribution: Urban concentration ..................................................................................................................... 204.2 Gender Participation: Women in urban services, rural gaps persist..........................................................234.3 Employment type: Dominance of regular wage work and self-employment.................................264.4 Age Profile: Dominance of prime-age workforce.....................................................................................................294.5 Educational Attainment: Job access and stratification........................................................................................ 304.6 Informality: Limited access to social security benefits.........................................................................................324.7 Earnings inequality in India: Sectoral and gender dimensions.....................................................................37 5. Employment patterns across sub-sectors and regions...................................................................42 5.1 Major Sub-sectors by employment and responsiveness................................................................................... 425.2 State-wise services employment shares and trends...............................................................................................475.3 Comparative dynamics across states and sub-sectors: 2011–12 vs 2023–24.................................52 Sub-sectoral Employment by NIC-2008 Industry Groups...............................................................................76 Sub-sector share in each state’s services employment share in 2023-24................................................79 State Profiles and Recommendations.......................................................................................................................81 List of Figures Figure 2.1:Share of employment by sector and World Bank income groups, 1992 to 2022..............8Figure 2.2:Employment share by sector (world).................................................................................................. 9Figure 2.3:Employment share by sector (India)....................................................................................................... 9Figure 3.1:Estimated workers in India, by industry and type of employment.........................................14Figure 3.2:Share of employment by industry...........................................................................................................15Figure 3.3:Share of employment in services sector..............................................................................................16Figure 3.4:Number of workers in services sector in India (in millions)........................................................16Figure 3.5:S