While service sector has grown, all service sector activities are not growing equally well. Service sector in India employs many different kinds of people. At one end, there are a limited number of services that employ highly skilled and educated workers. At the other end, there are a large number of workers engaged in services such as small shopkeepers, repair persons, transport persons, etc. These people barely manage to earn a living and yet they perform these services because no alternative opportunities for work are available to them. Hence, only a part of this sector is growing in importance.

So far, we have seen how different sectors contribute to Gross Domestic Product of India and also realised the comparative importance of the three sectors. This helps us to analyse the shifts that take place or don’t take place for both production and employment.

For our country, we don’t see substantial shift in employment and to explore this, we use another method of classification focusing on the nature of employment. The classification discussed below emphasizes the problems of employment and the associated conditions of work even more starkly.