Name: Rajeevakumar
Country: India

Year: 2026
Volume: Volume-11, (Special Issue: March 2026)
Page Number: 149-154
DOI: https://doi.org/10.5281/zenodo.19233312

ABSTRACT
The service sector has emerged as the most dynamic component of the Indian economy and plays a significant role in driving economic development. Over the past three decades, India has experienced a remarkable transformation from an agriculture-dominated economy to a service-driven growth model. The expansion of industries such as information technology, telecommunications, financial services, tourism, and healthcare has significantly improved productivity and contributed to economic growth.
The service sector currently accounts for more than half of India’s Gross Domestic Product (GDP) and employs a substantial portion of the workforce. This study examines the relationship between service sector productivity and economic development
in India. The research focuses on analyzing productivity trends in various service industries and their contribution to national income, employment generation, and technological progress. The study relies on secondary data from government reports, institutional publications, and international databasesmcovering the period from 2000 to 2024. Descriptive and analytical methods are used to evaluate the productivity growth of the service sector and its impact on the broader economy. The findings suggest that productivity improvements in knowledge-based services such as information technology, telecommunications, and financial services have played a critical role in accelerating India’s economic growth. However, productivity growth remains uneven across different service industries due to technological disparities, skill shortages, and structural constraints. The study concludes that strengthening human capital, promoting digital infrastructure, and encouraging innovation are essential for sustaining productivity growth in India’s service sector and ensuring longterm economic development.

Keywords: Service Sector, Productivity, Economic Development, India, Structural Transformation, Service Economy.