Services contribute more than half of India's GVA but a much smaller share of employment. How can better sectoral measurement help policy for jobs-led services growth?

Services produce about 52.9% of India's GVA (2024-25) but provide only about 30% of jobs [1]. The growth has been led by skill-heavy segments like IT and finance, while most service workers stay in small, low-productivity units. Until 2026 the sector had no monthly output indicator, and the IIP covers only industry [1]. A jobs-led services policy first needs better measurement.

Measurement gaps behind the GVA–jobs mismatch

• Coverage blind spots: the sub-sectors left out of the Index of Services Production (ISP) make up nearly 33% of services GVA. Units with turnover below ₹20 lakh do not need GST registration, so they fall outside the index [4]. Much of services employment sits in exactly these units.
• Formal-sector bias: ISP tracks only the formal sector [3]. Policy risks favouring segments with high output but few jobs.

How better sectoral measurement can guide policy

• Targeting job-rich sub-sectors: monthly data shows sharp differences between sub-sectors. In July 2026, retail grew +18.5% and administrative & support services +20.9%, while air transport fell −8.4% [2]. Matching this output data with employment data can show which sub-sectors create jobs, so incentives can go there.
• Timely response: a lag of about 60 days [1] allows early credit or skilling support for labour-heavy segments that are shrinking, such as repair services (−5.0%) [2].
• Skilling–demand alignment: sub-sector trends can guide Skill India courses and the push for services exports, where the target is a 10% global share by 2047 [1].
• Tracking formalisation: this is the first use of GST data for statistics [3]. It can show whether small firms are joining the tax system. The index cannot yet separate new reporting from new output, though [4].

Strengthening the measurement base

• Informal services: bring in ASUSE estimates and reuse the informal-sector method already built for the IIP [4].
• Better price correction: producer price indices (SPPIs) exist for only five sub-sectors [3]. The Technical Advisory Committee on ISP (TAC-ISP) asked DPIIT to expand them [4].
• Data systems: line ministries such as civil aviation, shipping and road transport should report monthly [4]. ASISSE will add health and education, both large employers [1].

Better measurement turns services policy from guesswork into targeted action. If ISP is extended to informal units and linked to employment data, it can steer growth towards labour-heavy, productive services. This would support the TAC's goal of a complete services index and SDG 8 (decent work and economic growth), and make the services-led path to Viksit Bharat 2047 one that creates jobs.