India has struggled with the question of what to make in India—manufacturing or services. The Economic Survey 2014–2015 articulated that this was a false choice. Instead, India faced a choice between two disparate types of sectors, unskilled-intensive and skilled-intensive, in both of which India possessed a comparative advantage. Two years down the line, the Economic Survey 2016–2017 suggested that labour-intensive sectors may be more effective in addressing India’s job challenge. The World Economic Outlook Report 2018 has suggested that a rapid replacement in the share of manufacturing jobs by services is likely to have a welfare-enhancing effect on developed and developing economies alike. As the Economic Survey 2014–2015 suggested that this is both a positive and a policy question. This article re-examines this question of manufacturing versus services in the Indian context to contribute to this debate. Specifically, we use the KLEMS India dataset to examine the dynamics of labour productivity associated with (a) a steady shift in the composition of the workforce towards the services sector and (b) investment in human capital proxied by changes in the labour quality index. Contrary to the WEO’s policy prescription, our findings suggest that an increasing prevalence of informal job contracts in services could potentially weaken the positive relationship between labour quality and labour productivity. Additionally, we observe that India’s labour force seems to be rapidly shifting towards services sub-sectors with lower productivity. This mechanism is likely to obstruct any potential gains in productivity, associated with an optimal relocation of factors of production.

JEL codes: J21, J24, O14, C31, C33

印度一直在努力解决在印度生产什么的问题（制造或服务）。《 2014-2015年经济调查》明确指出，这是错误的选择。相反，印度面临着两种不同类型的部门之间的选择，即非技术密集型部门和技术密集型部门，而印度在这两个部门中都具有比较优势。两年过去了，《 2016-2017年经济调查》表明，劳动密集型行业在应对印度的就业挑战方面可能更有效。《 2018年世界经济展望报告》表明，服务业迅速取代制造业工作岗位的份额可能对发达和发展中经济体都产生促进福利的作用。正如《 2014-2015年经济调查》所指出的那样，这既是积极的问题，也是政策问题。本文重新审视了印度背景下的制造业与服务业这一问题，以促进这一辩论。具体而言，我们使用KLEMS印度数据集来检查与以下方面相关的劳动生产率动态：（a）劳动力组成向服务业的稳定转移；（b）劳动质量指数变化为人力资本投资提供的支持。与《世界经济展望》的政策规定相反，我们的发现表明，服务业非正式工作合同的日益普及可能会削弱劳动质量与劳动生产率之间的积极关系。此外，我们观察到印度的劳动力似乎正迅速向生产率较低的服务子行业转移。这种机制可能会阻碍任何潜在的生产率提高，

JEL代码： J21，J24，O14，C31，C33