Boosting Assam’s Services Sector

The NITI Aayog’s latest twin reports on India’s services sector have laid bare the ground realities of Assam’s service sector and the untapped potential. While the state is grappling with the problem of increasing numbers of educated unemployed, unlocking the potential of the services sector can help it absorb the unemployed besides increasing contribution to the state’s economic growth. Nevertheless, the NITI Aayog’s report, India’s Services Sector: Insights from Employment Trends and State-Level Dynamics, highlights that as of 2023-24, 30.1% of Assam’s 51 lakh workforce is employed in the services sector. While this is a marginal decline from 30.7% in 2011-12, the employment in the services sector of the state is marginally above the national average of 29.7%.  The factsheet presented in the report reflects the national trend of urban-led growth in the services sector in the state, with urban areas accounting for 71% of the total employment in the sector and rural areas accounting for 25.8%. The figures also speak volumes about the large-scale migration of rural youth to the urban areas of the state for employment in the services sector. Another critical highlight from the employment data in the services sector is the gender divide being prominent. The State Government’s initiative to create 40 lakh Lakhpati Baideos under the Mukhyamantri Mahila Udyamita Abhiyan has brought a golden opportunity to leverage the statewide women’s entrepreneurship programme to bridge the gender gap through increased employment of rural women in entrepreneurial ventures of women Self Help Group members. This will, however, require handholding support for women’s SHGs to guide their members in setting up sustainable microenterprises and providing marketing support to sell their produce. The NITI Aayog’s second report, India’s Services Sector: Insights from GVA Trends and State-Level Dynamics, has listed some suggestions to boost services sector growth in the state, which includes developing rural agri-services to integrate cold chains, packaging, and digital logistics in tea, sericulture, and food clusters to boost rural service employment. This calls for pushing infrastructure development and digital economy integration to ensure that rural enterprises are market-ready and sustainable. Other suggestions by the Apex Policy Think Tank for strengthening Assam’s service sector are scaling circuit-based eco- and cultural tourism to promote hospitality; digital interpretation and vernacular experience services across riverine, forest, and heritage zones; and enabling decentralised local service platforms to support SHG/co-operative-led service delivery in crafts, wellness, and local enterprises via digital onboarding and market access tools. Implementing these suggestions calls for reimagining the skills in handloom and handicraft, such as weaving, natural dyeing, cane and bamboo craft, embroidery, food processing in the context of the modern market economy and customer sentiments, packaging, global design sensibilities, organic food and nutritional values, etc. Investing in creating a micro-enterprise based on a traditional skill and heritage craft alone is not going to work if the products cannot withstand stiff market competition. The NITI Aayog’s twin report also outlines the priorities and roadmap for accelerating services sector growth, which applies equally to the state. The four-pillar roadmap outlined by it calls for accelerating formalisation and extending social protection to self-employed, gig workers, and MSME workers for improving job quality; enabling women and rural youth to access high-growth services through targeted skilling, digital infrastructure, and safe mobility to unlock latent labour reserves; and investing in technology-led skilling to prepare workers for twin transitions of digitalisation and the green economy.  The policy think tank rightly insists: “Service opportunities must not be confined to metros and a handful of states. Developing second-tier service hubs, enhancing physical and digital infrastructure, incentivising state-level reforms, and creating regional service clusters will help spread growth more equitably and unlock underutilised productivity potential.” This emphasis on balanced regional growth highlights the crucial role of boosting the service sector in accelerating economic growth in a state like Assam. Addressing the issues of balanced growth in the services sector within the state is pivotal to fully saturating the untapped potential. Boosting growth of the services sector in rural Assam is critical to increasing sustainable growth of Guwahati and various urban growth centres in the state so that rural-to-urban migration is moderated by local employment opportunities. The increasing number of gig workers, including aggregated taxi drivers, food and other goods delivery agents, and digital freelancers who offer their professional services in graphic design, digital content creation, social media marketing, etc., in the state is reflective of the growth of the services sector driven by the platform-based economy. Increasing the social safety nets, such as health coverage, income security and growth, and legal protection of gig and informal workers in the state, is essential to make the services sector resilient through stabilisation of livelihoods. The NITI Aayog’s twin reports will be useful for the state to identify strengths and structural gaps in the services sector, but the resilience of the sector will depend on innovation and strategy which are grounded in local realities.