The service sector in India has been a major cause for the growth of the Indian economy in the past decade, making the country one among the top ten, fastest growing economies in the world. As per the Economic Survey, between 2002-03 and 2006-07, services contributed 68.6 per cent of the overall average growth in GDP, and in 2006-07 the service sector accounted for 51.1 per cent of the Gross Domestic Product.

Based on data sourced from NSSO 2004-2005, the sectoral share of employment in the service sector for these years was 457.82 million. In the five-year period ending 2005, employment in the service sector had risen from 22.7 per cent to 23.4 per cent, adding 16.8 million workers. Within this sector, trade, and hotels and restaurants were the largest gainers, and accounted for 10 million of the increase. Overall, trade, hotels, transport and communication are the largest employment providers, accounting for 14 to 16 per cent of the total workforce. The second largest employer is community, social and personal services, with a 7 per cent share. [C. Rangarajan, et al (2007) “Revising Employment and Growth”, ICRA Bulletin, Money and Finance, Vol. 3 (2)]

Given the economic importance of the sector and its potential role in expanding employment, the union government constituted a high-level group in the Planning Commission, under the chairmanship of Anwarul Hoda, to monitor its performance in May 2007. After studying various factors influencing the performance of the service sector, the group is to suggest policy measures to improve and sustain its competitiveness in the coming years. The group is to submit its report in early 2008. 

Considering the expansion of the service sector, the magnitude of its workforce and its potential to change the nature of the work for a large number of workers in the future, Labour File focusses this issue, on various concerns relating to the workforce in this sector. 

In an era where innumerable retail chains – small as well as corporate-backed giant chainsare coming up in India, Bijoy Basant Patro in ‘Tired Souls, Sleepy Eyes, Aching Legs: All in a Day’s Work’, looks at the condition of the workforce in these retail shops. The new trend of retail shops, catering to the middle class and upper-middle class shoppers, gives enormous job opportunities to youth but at the same time creates a work situation with no accountability for the employer. Whereas the workers are accountable to the management for what they do, the management is in no way accountable for their feckless attitude towards the staff. The work culture in these shops is generally exploitative and insecure, undermining claims that the growth in employment promised by this sector is unqualifiedly good.

Praveen Jha, in ‘Sectoral Changes and the Employment Scenario in the Indian Economy in the Time of Reforms’, looks at the role of the service sector in the growth of employment, focussing on the type of employment it creates. He also critically explores the drastic unemployment scenario among the youth, emphasising that the growth process is unable to accommodate the aspirations of a substantial segment of the country’s large young population.

As per the NSSO estimates, the service sector accounts for about 7 per cent of female employment in rural areas and 49 per cent in urban areas. But Neetha Pillai, in her article ‘Gender Dimensions of Service Sector Employment’, establishes that these sectors are driven by the stereotyped notion of women’s work and show no signs of any change in the gendered patterns.

Chittranjan Senapati in his article ‘Social Exclusion in the Services Sector: A Study of SCs in Indian Banking’, examines the employment situation of Scheduled Castes in public sector banks, and the reasons for and the extent of their exclusion from the sector. He raises the question of whether reservations should continue and whether it is the only answer for the empowerment of SCs.

In his article, ‘Downsizing and Outsourcing of Government Services’, C. Chandran Pillai points out the drastic reduction of workers in various government departments and crticises the government for moving ahead with its retrograde anti-worker and anti-people policies.

Without implementing any concrete reform processes in the police force, the government is shunting its responsibility of protecting its people to private forces, forcing the public to pay for its security criticises R.S. Tiwari in ‘Privatising the Police’. He fears that the world may go back to the pre-French Revolution era, in which mercenaries were used extensively, if the governments of nations go ahead with the trend of privatising public security services and entrusting those companies with the job of protecting the country from external enemies.

Shrarit K. Bhowmik in ‘The State of Labour’ reviews the condition of the Indian workforce at the end of 2007. Looking at the trend of informalisation and the situation of the workers in the unorganised sector, he says that though there may be major ideological differences between the NDA and the UPA governments, their views are similar as far as labour is concerned.

On 3 December 2007, the Parliamentary Standing Committee on Labour submitted its 25th report to Parliament, reviewing the Social Security for Unorganised Sector Workers Bill 2007, introduced by the government in September. The Report includes discussions of the background and provisions of the Bill, along with the recommendations of the Committee. In this issue of Labour File, we reproduce the discussions of the Committee of specific provisions of the Bill and the arguments for changes and additions.