Knowledge-Intensive Service Industries, Capital Deepening and Labor Productivity in India: Evidence from an Endogenous Growth Framework

Authors

  • Sulabha Sharma Research Scholar, Department of Economics, Mahatma Gandhi Kashi Vidyapith, Varanasi Author
  • Dr. Rajesh Pal Professor, Department of Economics, Mahatma Gandhi Kashi Vidyapith, Varanasi Author

DOI:

https://doi.org/10.31305/rrjss.2026.v06.n01.008

Keywords:

Knowledge-Intensive Service Industries, Labour Productivity, Capital Deepening, Composition, Endogenous Growth Theory

Abstract

The knowledge-intensive service industries (KISI’s) have revolutionized the economy by bringing about knowledge, innovations, and human capital as major factors of production in productivity growth and economic development. In India, the service sector accounts for more than fifty percent of Gross Value Added (GVA), with some important sectors being Information and Communication, Financial and Insurance Activities, and Professional, Scientific and Technical Services which are becoming increasingly important in technological innovation and development. Taking into consideration the concept of endogenous growth theory, the current study examines the significance of knowledge-based service sectors for the growth in labour productivity in India, focusing mainly on the dimensions of capital deepening, capital structure, and labour skill levels. The labour productivity is estimated using the ratio of value-added per labour unit employed. The capital stock, capital composition index, and labour quality index can be seen as key independent variables for the present research work. Data has been collected from the database of India KLEMS. Various statistical methods like descriptive statistics, correlation analysis, and regression analysis will be applied in this study.

Author Biographies

  • Sulabha Sharma, Research Scholar, Department of Economics, Mahatma Gandhi Kashi Vidyapith, Varanasi

    Ms. Sulabha Sharma is a Ph.D. Research Scholar in the Department of Economics at Mahatma Gandhi Kashi Vidyapith (MGKVP), Varanasi, Uttar Pradesh, under the supervision of Professor Rajesh Pal. She completed her Bachelor of Arts (Honours) in Economics and Master of Arts in Economics from Banaras Hindu University (BHU), Varanasi. Her academic and research interests include development economics, service sector economics, employment, regional development, and macroeconomic policy. Her doctoral research focuses on analysing the contribution of India's service sector to economic growth, employment generation, and structural transformation, with particular emphasis on technological change and regional disparities. She has authored and co-authored several research publications, including Analysis of Service Sector Dynamics with Respect to Uttar Pradesh (2025), A Time Series Analysis of Oilseeds Production in India (2025), From Health to Wealth: How Accessible Health Care Fuels Economic Development (2025), and India's Service Sector Resilience During Macroeconomic Disruptions: A Composite Index Analysis (2026). Her research employs advanced econometric and statistical techniques to examine economic trends and policy outcomes, contributing to the understanding of India's service-led development. She has also presented her research at national academic conferences and actively contributes to scholarly discourse through publications and collaborative research.

  • Dr. Rajesh Pal, Professor, Department of Economics, Mahatma Gandhi Kashi Vidyapith, Varanasi

    Professor Rajesh Pal is a distinguished Professor of Economics and Head of the Department of Economics at Mahatma Gandhi Kashi Vidyapith (MGKVP), Varanasi, Uttar Pradesh, India. He earned his Bachelor of Commerce from Symbiosis College of Arts and Commerce, Pune University, and his Master of Arts in Economics from Sir Parashurambhau (S.P.) College, Pune University. An accomplished academic and researcher, Professor Pal has authored five books, including Indian Banking and Globalization, Economic and Financial Sector Reforms in India, and Issues and Concepts of Economics, in addition to two e-books. His research has been published in reputed national and international journals, including Global Business and Economics Anthology (USA), Indian Journal of Regional Science, International Journal of Research in Commerce, Economics and Management, Southern Economist, and Kisan World. His scholarly work has also appeared in publications of the Government of India, including Social Welfare (Ministry of Women and Child Development), and in leading newspapers such as The Times of India. Professor Pal has presented research papers at numerous national and international conferences and has served as a reviewer for Horizon Research Publishing, USA. In recognition of his scholarly contributions, he received the Best Paper Young Scientist Award in 2012 from the Regional Science Association, Kolkata, for his paper titled Financial Inclusion: The Road Map to Balanced Regional Development. On Teachers' Day, 5 September 2021, he was honoured by the Government of Uttar Pradesh and Mahatma Gandhi Kashi Vidyapith for his outstanding contribution to higher education, particularly in the implementation of the National Education Policy (NEP) 2020. He also serves as the Editor-in-Chief of Arthiki, the academic journal published by the Department of Economics, Mahatma Gandhi Kashi Vidyapith, Varanasi.

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Published

2026-06-25

Issue

Vol. 6 No. 1 (2026): Research Review Journal of Social Science

Section

Articles

How to Cite

Sharma, S., & Pal, R. (2026). Knowledge-Intensive Service Industries, Capital Deepening and Labor Productivity in India: Evidence from an Endogenous Growth Framework. Research Review Journal of Social Science , 6(1), 71-86. https://doi.org/10.31305/rrjss.2026.v06.n01.008