Determinants of Service Sector Growth in Haryana

The faster growth in Service sector has been experienced by the Indian economy and most of the Indian states as well. The Services sector is a highly heterogeneous sector having varied activities. The contribution of service sector and its sub sectors varies in terms of their share to GSDP and in total employment. The present paper aims at determining the factors responsible for the rise of Service sector in Haryana. It explores the factors which affect the dynamism of change in the pattern of growth of Service sector in Haryana. The ARDL model has been used. The findings of the study show that (i) the value of Service GSDP is 0.46 which means that Service sector growth is propelled from within by 0.46%. It means that one percent rise in Service GSDP will boost up Service sector growth by 0.46% (ii) a relatively higher growth trend in income is the major factor for Service sector growth in Haryana (iii) Investment in infrastructure and fixed capital has led to growth of service output. To sum up, the determinants of Service sector growth in Haryana are- Commodity sector production, Exports, GSDP per capita and invested capital. All these shows significant relationship to the Service GSDP in the short and long period.