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Structural changes are the average patterns of development observed by Chanery and colleagues in time series and cross-sectional studies across countries. Every economy's structural alteration is a direct result of the development process. As a result, a dynamic economy in the course of development must undergo fundamental changes in the occupational structure of the economy. Historically, the most prevalent structural changes have followed a succession of moves from agriculture to industry and services. As a result, an underdeveloped economy is characterized by a large share of agriculture; as the economy develops, the percentage of the sector grows while agriculture shrinks; and finally, as the economy develops to a reasonable level of development, the service sector grows in importance, becoming a significant component of the economy. Structural shifts and changing sectoral shares are valid for the national product workforce and other primary indicators. Structural changes are not simply characteristics of economic development; they are also required to sustain economic progress. Kuznets established that changes in sectoral composition caused by demand and supply-side factors are linked to growth. According to Fisher and Clark, the income elasticity of demand for agricultural items is low; as income rises, demand for farm products drops; on the other hand, the income elasticity of demand for the industrial sector is high, and it is even higher for services. As a result, demand for industrial goods rises, and after reaching a certain level of wealth, demand for services increases dramatically. As a result, the industry does not have a significant growth potential, primarily dictated by market conditions. Secondary and tertiary sectors have more considerable growth potential, which will result in a more substantial contribution to GDP in the long run. Despite its declining percentage of GDP and contribution to employment, the primary sector remains a significant source of jobs. Agriculture continues to employ 57% of India's workers.

Vaidyanathan. (1986, 1994) discovered a direct link between state unemployment rates and the incidence of non-farm employment. He claims that agriculture's labor force absorption capability is limited, whereas the urban sector is known to support an ever-increasing and massive labor force. As a result, the rural non-farm sector functions as a supplementary sector, and the rural workforce is assigned to it. Visaria P. (1994) claims that the expansion of urban centers spurs non-farm employment in the surrounding rural areas. Aside from that, agricultural growth and commercialization promote various rural industrial activities by supplying raw materials, increasing demand for inputs and allied services, increasing demand for consumer goods, and producing surpluses for investment. Islam (1997). observed that the factors such as infrastructural facility extensions, he claims, are substantially associated. Several human-resource-related factors, including rural worker education and skill development, and credit availability for non-farm enterprises, have aided the pastoral diversification process. Chadha, G.K., (2003) published a report titled Rural Employment in India: Current Situation, Challenges, and Expansion Potential, in which he found that, at the state level, the post-reform period saw a radical reversal in the labor deployment between agriculture and non-agriculture sectors. According to Ghoshal (2005), one of the reasons for the increase in non-farm activity and employment is the lowering in rural land-man ratio owing to demographic pressure, which causes family farms to become unsustainable without non-farm revenue. Das, P., (2011-12), The decline in the labor force participation rate in recent years has been attributed to the increase of education among rural youth and the economic downturn, decrease in work opportunities and reduced labor absorption in agriculture. As a result, the unemployment rate in rural areas has diminished. Hundreds of millions of young people are pursuing higher education to gain better employment opportunities. If the slow pace of job creation continues, the gap between aspirations and reality in India's labor markets will widen.

Data Sources
The information on diverse dimensions of employment in the country was taken from the unit level data of the quinquennial employment and unemployment surveys (EUS) performed by the National Sample Survey Office. This article is based on census data (NSSO). In 1972-73, the first NSSO-EUS was conducted to determine the country's volume and structure of employment and unemployment. Conducted these surveys in 1983, 1993-94, 1999-2000, 2004-05, 2009-10, and 2011-12. The output and employment performance of rural areas was investigated before the reform, after reform, and during the period of economic acceleration.
Employment situation in rural India
The reallocation of the workforce from primary to secondary and tertiary sectors is one of the most fundamental elements of structural restructuring. Urbanization and agglomeration are other outcomes of this process. Any economy that operates solely on market principles will allocate labour based on marginal labour productivity. According to Fisher and Clark's (1939) hypothesis, labour allocation and reallocation occur so that sectoral productivity convergence is eventually achieved. According to them, productivity disparities would widen in middle-income countries before converting to high levels of affluence. Like most developing countries, we know that India's rural economy by the persistence of a large amount of excess labour disguised as open unemployment. It is self-evident that rising population pressure on land has resulted in a massive drop in the land-to-man ratio and a decrease in labour productivity in agriculture. Small and marginal farmers cannot cultivate due to new capital-intensive agriculture technology. The agricultural sector's labour force moves to non-agricultural sectors, either within the rural sector or through short-term migration to urban and semi-urban areas.
Furthermore, infrastructure development, particularly the transportation and communication network, appears to have underserved the process of the short-term rural labour movement to urban and semi-urban areas, notwithstanding its modest scale. All of these variables have an impact on the rural workforce.
Shares of Rural Areas
The rural sector's contribution to India's economy from 1970 to 2011 can be seen in its national output and employment percentage. (Table1). In 1970-71, rural areas employed 84.1 percent of the total workforce and created 62.4 percent of the entire net domestic product (NDP).  The diminishing contribution of the primary sector to GDP without a corresponding reduction in employment is attributable to the fact that a large portion of the economy's overall growth came from capital-intensive sectors in urban regions that did not generate considerable work. After 1999-00, the rural economy's growth rate increased and became competitive with the urban economy . As a result, overall, NDP has remained stable at roughly 48%. Despite a faster growth rate, the rural proportion of national NDP fell somewhat from 2004-05 to 2011-12. On the other hand, rural employment has steadily declined from 76.1 percent in 1999-00 to 70.9 percent in 2011-12. These data reveal that while the urban economy outperforms the rural economy in terms of output, urban employment is less than half that of rural jobs. This has significant consequences for worker productivity differences between rural and urban locations. Rural India's economy is oriented toward self-employment, and the best approach to gauge employment is likely to be measured in terms of the workforce participation ratio.
On the rural WFPR, (Table 2) delivers the message. The WFPR for all people fell from 45.1 percent in 1961 to 36.1 percent in 1971, then increased to 40 percent in 1991, fell to 38.0 percent in 2001, and then increased to 41.8 percent in 2011. Male and female workforce participation ratios show nearly identical trends, with a minor exception in the case of males. Rural India's economy is oriented toward self-employment; hence the best approach to assess employment is to look at the labor participation rate.

Table -1 Share of Rural Areas in Total NDP and Workforce

Year	Economy	Work Force
1970-1971	62.4	84.1
1980-1981	58.9	80.8
1993-1994	54.3	77.8
1999-2000	48.1	76.1
2004-2005	48.1	74.6
2011-2012	46.9	70.9

Source: NSS data on employment and unemployment survey

Table -2 Rural Workforce Participation rates in India according to Sex
(1961-2011) As per Census Data

Year	Male	Female	Persons
1961	58.2	31.4	45.1
1971	53.6	15.5	36.1
1981	53.8	23.2	38.9
1991	52.5	26.7	40.0
2001	52.2	23.1	38.0
2011	53.0	30.0	41.8

Sources: Various Census Reports, GOI.
Structural Changes in Rural Economy
India's rural economy has grown from 229 billion to 34167 billion at current prices and 3199 billion to 21107 billion at constant prices over the last sixty decades. Employment increased from 191 million to 336 million during the same period. Thus, despite a nearly seven-fold rise in output in rural India, employment could not even double.
The output and employment growth rates demonstrate a considerable discrepancy between sectors over time, which is a guiding  tool in comprehending the country's rural economic development. Table 3 displays the NDP and job growth by sector, whereas table 4 provides the sectoral arrangement. From 1970-71 to 1993-94, the agriculture sector's NDP grew at 2.57 percent per year, compared to 5.7 percent per year in non-farm industries (table 3). As a result, by 1993-94, agricultural output had declined from 72.4 percent to 57 percent of total rural output (table 4). During the pre-reform period, the manufacturing, construction, and service sectors grew by 5.18 percent, 3.94 percent, and 6.1 percent, respectively, while their share of rural NDP increased by 2, 2, and 10 percentage points, respectively.
Table 3: Growth Rates of NDP at 2004–05 Prices and Employment in Rural Areas (%)

Period	Agriculture	Manufacturing	Construction	Services	Non-agriculture	Total
Net domestic product (at constant prices)
1971–94	2.57	5.18	3.94	6.10	5.70	3.72
1994–05	1.87	8.38	7.92	8.55	7.93	5.06
2005–12	4.27	15.87	11.49	3.48	9.21	7.45
Employment (usual status)
1973–94	1.72	3.55	4.82	4.51	4.22	2.16
1994–05	0.74	2.79	8.32	3.25	3.70	1.45
2005–12	-2.04	0.67	12.09	1.35	3.65	-0.28

Source: Same as Table 1
Table 4: Sectoral Share in NDP and Employment in Rural Areas, 1970 to 2012 (%)

Year	Agriculture	Manufacturing	Construction	Services
Share in rural NDP (at current prices)
1970–71	72.4	5.9	3.5	17.1
1980–81	64.4	9.2	4.1	20.6
1993–94	57.0	8.2	4.6	26.8
1999–00	51.4	11.1	5.6	28.6
2004–05	38.9	11.5	7.8	37.3
2011–12	39.2	18.4	10.5	27.0
Share in rural employment
1972–73	85.5	5.3	1.4	7.3
1983	83.6	6.2	1.3	8.8
1993–94	78.4	7.0	2.4	11.4
1999–00	76.3	7.4	3.3	12.5
2004–05	72.6	8.1	4.9	13.9
2011–12	64.1	8.6	10.7	15.5

Source: Different  Reports  on Employment  and Unemployment  of  NSSO, GOI.
Agriculture's growth rate fell to 1.87 percent in the post-reform era (1993-94 to 2004-05), whereas non-farm sector growth rates upturn to 7.93 percent. The agricultural slowdown in the rural economy was due to much more substantial growth in non-farm sectors, which boosted the rural economy's growth rate to above 5%, compared to 3.72 percent before the reform time. Agriculture's part of the rural economy fell even further, from 57 percent in 1993-94 to 39 percent in 2004-05, resulting from these changes. As a result, by 2004-05, the rural economy became increasingly non-agricultural rather than agricultural. In 2004-05, the non-farm industries of services, manufacturing, and construction accounted for 37.3 percent, 11.5 percent, and 7.8 percent of rural output (Table 4). The agriculture industry saw a resurgence from 2004-05 to 2011-12, with an annual growth rate of 4.27 percent.
Similarly, growth in the non-farm sector surged to 9.21%. This time is known as "the period of economic acceleration" because of the rapid expansion in farm and non-farm sectors. During this time, the whole rural economy grew at 7.45 percent each year. It's worth noting that agricultural prices rose faster than non-agricultural pricing, and the growth rates in both sectors were nearly the same at present values. As a result, agriculture's share of the rural NDP did not fall any further, rising to 39.2 percent in 2011 from 39.1 percent in 2004-05. In the non-farm sectors, service sector output grew slower at 3–4% after 2004–05, compared to 8.55 percent in the previous decade. Between 2004-05 and 2011-12, the manufacturing and construction industries grew at an impressive 15.7 percent and 11.49.1 percent, respectively. As a result, the service sector's proportion of rural economies has decreased from 37.3 percent to 27.0 percent over the last seven years, while manufacturing's share has climbed from 11.4 percent to 18.4 percent, and the construction sector's part has increased from 7.8 percent to 10.5 percent. The rural economy diversifies significantly away from agriculture, as seen by growth trends in many sectors. From an economic development standpoint, employment should follow a similar trend and pattern. This was determined using employment data from successive NSSO rounds corresponding to the year for which the rural-urban income distribution was available. Table 3 demonstrates that employment and output growth in rural areas followed different patterns. During the pre-reform period, rural employment grew at a rate of 2.16 percent per year before slowing to 1.45 percent in the post-reform period and turning negative (-0.28 percent) during economic acceleration. As a result, employment grew slower than output and even dropped after the record output growth of 2004-05.
The non-farm industries could not absorb the labor force leaving agriculture, which resulted in sluggish growth and negative employment growth in rural areas. Table 3's findings also suggest that employment elasticity in rural areas has decreased, turning negative after 2004-05. The development that is not sensitive to employment raises questions about the rural economy's ability to deliver meaningful jobs to a growing population and a workforce leaving agriculture. Manufacturing and the service sector suffered a reduction in employment growth, whereas the construction industry saw a dramatic acceleration in employment expansion over time.
Changes in rural Employment after 2004-05
Despite a 7.45 percent yearly rise in output, rural areas experienced negative employment growth after 2004-05. It's essential to figure out whether the drop in the rural workforce between 2004-05 and 2011-12 was attributable to increased unemployment or a shift in the labor force. These factors are investigated by looking at changes in labor force participation and workforce distribution across sectors by household type and gender and tracking the activity status of the "not in labor force" population between 2004-05 and 2011-12. During high productivity and falling employment (2004-05 to 2011-12), the rural population grew by 62 million, with male and female proportions equal (Table 5). As evidenced by
Table 5: Changes in Population and Economically Active Persons in Rural Areas between 2004–05 and 2011–12 (Millions)

Particulars	Male		Female		Persons
	2004-05	2011-12	2004-05	2011-12	2004-05	2011-12
1 Population	401	432	379	410	780	842
2 LFPR (%)	56	55	33	25	45	41
3 Labour force	223	239	126	104	349	342
4 Workforce	219	235	124	102	343	336
4.1 Agriculture	146	139	103	76	249	216
4.1.1 Cultivators	93	92	67	49	160	141
4.1.2 Agriculture labour	53	48	37	27	89	75
4.2 Non-farm	73	95	21	26	94	121

Source:  NSSO Various Employment and Unemployment Survey  Reports.
 Between 2004-05 and 2011-12, the share of the male population joining the labor force stayed practically similar (55%), and 16 million out of 31 million more male population joined the labor force. However, female labor force participation has decreased dramatically from 33% in 2004-05 to 25% in 2011-12, resulting in a 22 million reduction in the female labor force. Between 2004-05 and 2011-12, the rural labor force (male and female) decreased by nearly 7 million people. Surprisingly, NSSO data revealed no change in unemployed (based on normal status) over this period and showed that the workforce in rural areas shrank by a similar amount as the labor force. It is worth noting that the removal of female workers from the labor force occurred in all types of rural households. In both percentage and absolute terms, the withdrawal of female workers from the labor force is highest among agricultural labor households, followed by cultivators and non-farm households.
Many academics have proposed reasonable explanations for women's absence from the workforce (Mazumdar and Neetha, 2011; Rangarajan et al., 2013; Chand and Shrivastava; 2014). Increased participation in educational activities is one of the reasons for the drop in female LFPR (Rangarajan et al., 2011).

Table 6: Reason-wise Distribution of ‘Not in Labour Force’ Population in Rural Areas  (%)

Source:  As  mentioned  in “Data Sources” (Different  Reports  of NSSO Employment  and  Unemployment  survey )
Among the household types, the increase in the share of education in the total "not in labor force" female population was three percentage points for agricultural workers compared to 1.4 percentage points for non-farm households. Similarly, the male "not in labor force" population in education witnessed a substantial increase across all household types during consideration. Increasing enrolment for education is a desirable trend in terms of improvement in education level and skills for the process. But the real challenge will be to create employment opportunities for those educated people who join the labor force after acquiring education. Most of the employment opportunities have to be made in the non-farm sector as the natural choice of the educated youth would be to join the more productive non-farm sectors instead of agriculture. It is interesting to note that education accounted for one-third of the entire reduction in the female labor force. In contrast, the withdrawal of male counterparts from the labor force (from agriculture) was the same as increased education. Many females, withdrawn from the labor force, confined themselves to household activities. The highest increase in the proportion of females removed from farm work and staying back at home is reported in the case of agricultural worker households. A further increase in the proportion of females in domestic activities is also noticed in the case of non-farm families, whose economic conditions are not very good. Four chose to withdraw from the workforce and stay back in households.
One argument is that high growth in agricultural output and the resulting terms of trade for agriculture during 2004–04 to 2011–12 resulted in a high rate of increase in the income of farmers and agricultural laborers in this period, which led to a withdrawal from farm work. This appears to be a component of the explanation that can hold in their earnings. Some scholars argue that the female withdrawal from the labor force might be due to the reversal of an unprecedented increase in the female labor force caused by agrarian distress from 1999–2000 to 2004–05 (Abraham 2009; Thomas 2012). However, empirical evidence refutes such arguments because the reduction in female LFPR was not confined to only agricultural households but was across all house types in rural areas.
Other reasons for the workforce reduction appear to be (1) increasing mechanization of farm operations, (2) increasing reservation wage, and a lack of suitable work at that wage rate. (3) manufacturing jobs away from the place of residence, discouraging females from pursuing them; (4) a lack of skill to obtain well-paid non-farm jobs; and (5) rising tension between agricultural labor employers due to changing social relationships between them (Chand and Srivastava 2014).
Apart from the withdrawal of the labor force or workforce, sizeable shifts in the workforce across sectors were also observed between 2004-05 and 2011-12. Of the 33 million workers who left agriculture, 27 million (81%) were female, and 6 million (19%) were male (Table 5). Further, the outgoing workforce from agriculture comprised both cultivators and agricultural labor, with their respective shares of 56% and 44%. Out of 27 million female workers who left agriculture, only 5 million joined non-farm sectors, and the rest withdrew from the labor force itself. In contrast, between 2004-05 and 2011-12, 6 million male workers left agriculture, and the 16 million additional labor force joined non-farm sectors. Based on this evidence, it can conclude that from 2004–05 to 2011–12, the rural workforce witnessed defeminization, and employment diversification towards non-farm sectors was biased against females.
Sector wise change in rural economy
Agriculture
The results reported in the preceding sections reveal that agriculture's contribution to rural output has gradually decreased. This is thought to be a positive move for the advancement of economic development. However, an over-reliance on agriculture as a source of employment has arisen as a significant issue. For the first time in its history, India's agricultural workforce shrank between 2004-05 and 2011-12. The decline rate was 2.04 percent. Despite this, agriculture employed 64% of the entire rural workers in 2011-12 while producing only 39% of total rural production. To achieve convergence between the share of agriculture in total output and employment, it is predicted that 84 million agricultural employees in rural areas would have to be transferred to non-farm sectors in 2011-12. This translates to an almost 70% growth in non-farm employment, which appears to be quite tricky. The vast disparity in worker productivity between agricultural and non-farm industries is due to an overdependence on agriculture. In 2011-12, per worker productivity in the farm industry was only $30,912, compared to 1,19512 in non-farm industries (at 2004-05 prices) (Table7).
This reveals that non-farm employment in rural areas was 2.8 times more productive than farm employment. The difference in per-worker productivity between the farm and non-farm sectors has decreased by 1%. Sector-specific implicit price deflators (2004–05=100) were used to deflate NDP.
Table 7: Trend in per Worker Productivity in Farm and Non-farm Sectors

	Real Productivity (Rs./worker)				Compound Growth Rate (%)
Particulars	1970-71	1993-94	2004-05	2011-12	1970-71 to  1993-94	1993-94 to 2004-05	2004-05 to  2011-12
1 Farm	13,841	17,629	19,933	30,842	1.06	1.12	6.43
2 Non-farm	34,128	53,453	82,990	1,19,685	1.97	4.08	5.37
3 Ratio: 2/1	2.47	3.03	4.16	3.88	0.90	2.92	-1.00

Source:  NSSO. Different  survey reports  on Employment  and Unemployment.
Manufacturing
Between 1970-71 and 1993-94, manufacturing production in rural areas grew at a 5.18 percent annual pace. The post-reform period (1993-94 to 2004-05) saw a higher rate of growth of 8.38 percent, which accelerated to 15.8 percent from 2004-05 to 2011-12. (see Table 3) Manufacturing grew faster than other sectors, increasing its proportion of rural NDP from 5.9% in 1970-71 to 18.4% in 2011-12 (see Table 4), indicating a definite trend toward industrialization in rural regions. On the other hand, the signals of automation were not evident in the changes in the job structure. Between 1972-73 and 1993-94, the manufacturing sector added 10.29 million jobs (or 29% of all nonfarm positions), and its percentage of total rural employment climbed from 5.3 percent to 7 percent. During the following decade (post-reform), the sector added 7 million jobs (23.4 percent of new nonfarm jobs). Yet, its share of total rural employment climbed by only one percentage point to 8.1 percent in 2004-05. Manufacturing employment increased by only 1.2 million people between 2004-05 and 2011-12. (4.9 percent share in incremental nonfarm jobs). Manufacturing employment grew slower in the second and third periods, falling from 3.55 percent in the first to 2.79 percent in the second and 0.65 percent in the third (see Table 3 ). Wearing clothes, tobacco products, textiles, and non-metallic mineral items are all examples of manufacturing products. The largest employment-generating sub-sectors are textiles, non-metallics, and food and drinks (Table 8 ). Between 2004-05 and 2011-2012, most of these subsectors had either employment stagnation or decline. The biggest impediment to rural employees entering the manufacturing sector appears to be a lack of skills and technical knowledge. The NSSO surveys paint a bleak picture of the degree of education and technical skill held by rural workers. In 2011-12, more than three-quarters of the rural workforce aged 5 to 59 years lacked even a secondary education (Table 9).

Table 8: Sub-sector wise Changes in Employment (Usual Status) in Manufacturing and Services Sectors

Sub-sectors	Employment: Usual Status (million)		Compound Growth Rate (%)	Share in Total Manufacturing Employment (%)
	2004–05	2011–12		2004–05	2011–12
Wearing apparel	3.4	4.2	2.9	12.3	14.5
Tobacco products	3.4	3.6	0.8	12.3	12.5
Textile	4.5	3.6	-3.2	16.0	12.3
Non-metallic mineral products	3.4	3.6	0.8	12.3	12.5
Food products and beverages	3.4	3.4	0.0	12.3	11.8
Machinery, metal products and transport equipment	2.1	3.0	5.7	7.4	10.4
Wood and wood products	4.1	2.8	-5.4	14.8	9.6
Furniture	1.7	1.5	-2.1	6.2	5.1
Chemical products	0.7	0.6	-2.6	2.5	2.0
Rubber and plastic products	0.3	0.4	1.1	1.2	1.3
Paper and printing, etc	0.3	0.3	-0.3	1.2	1.2
Leather and related products	0.3	0.3	-1.8	1.2	1.0
Others	0.0	1.7	-	0.0	5.8
Manufacturing sector: Subtotal	27.6	29.0	0.67	100	100
Wholesale and retail trade; repair of motor vehicles	18.5	18.8	0.3	38.9	36.0
Transport, storage and communication	8.6	10.0	2.3	18.0	19.2
Education	5.5	7.0	3.4	11.5	13.3
Hotel and restaurants	2.4	2.9	2.9	5.0	5.6
Public administration, defence
and compulsory social security	2.7	2.7	-0.5	5.8	5.1
Health and social work	1.4	1.6	2.0	2.9	3.0
Financial intermediation	0.7	1.1	7.1	1.4	2.1
Others	7.8	8.2	0.7	16.4	15.7
Services sector: Subtotal	47.6	52.3	1.4	100	100

Furthermore, only 1.3 percent of rural laborers aged 15 to 59 had a technical education. 6 Similarly, only 14.6 percent of this age group's rural workforce got vocational training to develop skills (knowledge, skill, and attitude) of skilled or semi-skilled employees in various crafts. Female laborers have a lower degree of schooling and technical education than their male counterparts, according to gender disaggregation. These statistics show that establishing industries and improving infrastructure are necessary but insufficient conditions for creating rural employment. Improvements in rural infrastructure must be followed by successful Human Resources Development programs that provide rural youth with the appropriate skills and training to match the job requirements in the rural economy.
Table -9  Education Level (General and Technical) of Usually Employed Rural Workers (Age Group 15–59 Years)(%)

Rural Workers	Male		Female		Persons
	2004–05 2011–12		2004–05 2011–12		2004–05 2011–12
Secondary education and above	19.7	27.1	6.8	11.8	14.9	22.3
With technical education	1.7	1.6	0.7	0.7	1.3	1.3
With vocational training	14.2	15.4	13.0	12.7	13.8	14.6

Source: Authors’ estimation based on unit level NSSO data on employment and unemployment survey.
Source: NSSO ,Various  Reports  on  Employment  and  Unemployment  Survey.
Service Sector
In rural areas, the service industry was the second-largest source of output and employment. In 2011-12, the sector accounted for around 27% of total rural production and 15.5 percent of full rural employment. According to National Accounts Statistics, the services sector experienced annual real NDP growth of 5.94 percent and 6.1 percent in urban and rural areas, respectively, during the pre-reform period; growth increased to 8.94 percent and 8.55 percent, respectively, during the post-reform period. Between 2004-05 and 2011-12, urban areas maintained an 8.42 percent increase in services sector production, while rural areas saw a 3.48 percent decrease. The service industry has played a significant role in the country's structural development, but its gains have been primarily centered in urban areas in recent years. In 1993-94, wholesale and retail trade and auto repair accounted for 27% of NDP's entire service sector. Between 1993-94 and 2004-05, this climbed to 37% due to remarkable annual growth in the entire services sector in rural areas.
From trade and hotel and restaurant activities, NDP fell by 4.8 percent and 2.5 percent per year in 2004-05 and 2011-12, respectively. Even though there was a substantial increase in financial services, transportation, storage, communication, and public administration and social security operations, growth in the overall services sector output slowed to a crawl.
The "shopping" behavior of rural households towards urban centers could be one of the reasons for the fall in output of some services in rural areas. Improved road connectivity and transportation and a surge in private vehicle ownership have made it easier for rural residents to travel nearby urban areas for shopping and other necessities. Although consumers in metropolitan regions have more options, this has a negative impact on rural trade and other enterprises.
After 2004-05, the service sector's output slowed, resulting in a decline in employment growth. Between 2004-05 and 2011-12, employment in the service industry grew at 1.35 percent per year, compared to 3.25 percent in the previous year (Table 3). Between 2004-05 and 2011-12, the service sector, which provides generally decent and comfortable work, accounted for only 15% of the 27 million new jobs produced in non-agricultural industries. Wholesale and retail trade, which includes auto repair services, was the largest sub-sector in terms of employment in 2011-12, accounting for 36.2 percent of total employment in services. However, from 2004-05 and 2011-12, job development in this sub-sector remained flat, resulting in a slowdown in overall service sector employment.

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