The emergence of services as an important source of inco
me in India has raised question of the sector’s
potential to act as an
engine of growth
. While there is optimism regarding the sector’s performa
nce,
specifically over the last two decade, a few are concerned
on the ‘sustainability of the growth process.’ A
major criticism against service led growth emerges from the
disproportional relation between income and
employment in the sector. This paper argues that the questio
n of stagnant employment should not be the
sole focus; rather the pattern of employment and its implic
ation on larger distributional questions should
also be incorporated within the broader purview of concerns.
To validate the argument, the paper presents
evidence on the changing structure of service sector employment
, from NSS data for the period 1983-
2005