India’s services employment landscape is undergoing a significant change, with 17 states reporting a decline in the share of their workforce employed in the services sector between FY20 and FY24. Analysis of data from two recent reports of the NITI Aayog reveals a stark divergence in job trends, even as a handful of major states continues to dominate the sector’s national output.
The most notable contractions were observed across the north-eastern states. Manipur saw the steepest drop, with the share of service sector employment falling by 12.3 percentage points from 46.7 percent in FY20 to 34.4 percent in FY24. It was followed closely by Assam (a drop of 11.5 points from 42 percent in FY20), Arunachal Pradesh (10.6 points) and Tripura (5.1 points). This would either suggest a structural pivot or substantial loss of service-related jobs in these regions over the four-year period.
It is to be noted here that the number of those employed in the service sector in the north-eastern states in absolute terms remains small reflecting its limited population.
Among major states, those like Maharashtra, Telangana, Kerala, Tamil Nadu and Andhra Pradesh also saw a moderate increase.
However, despite the widespread shifts in employment share, the economic contribution remains highly concentrated. Just five states—Maharashtra, Karnataka, Tamil Nadu, Uttar Pradesh, and Delhi—account for about 50 percent of the service sector’s national Gross Value Added (GVA).
Maharashtra alone contributes a massive 15.5 percent of the country’s service output. Gujarat, West Bengal, Telangana, Kerala and Rajasthan account for another 25 percent.
The sector’s high-value economic output remains unevenly distributed, anchored primarily in a handful of states.
First Published: Oct 30, 2025, 12:55
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