Really a bit of both, though, isn’t it?
Modern labour law simply makes it difficult to maintain servants at an affordable price. Minimum wage around here is about ten bucks an hour. I’m comfortably middle class, but hiring one servant at minimum wage - assuming no other expense whatsoever except $10 an hour, 40 hours a week - would consume a huge fraction of my net income. I’d have trouble affording much else once I fed myself and my daughter and paid the bills. At $10 an hour, if I had two servants we’d all be sleeping in my car. Of course you could argue that I can offset the cash outlay by providing room and board but then I have to have a place with another bedroom and have to feed the servant. No matter how you slice it I am out a third of my income.
In India, the minimum wage ranges around $3-$4 a day (it varies from place to place and by job types) and in practice most people are not covered by minimum wage law. Just a little cheaper.
Minimum wage laws have their roots in industrial settings, but have an inescapable effect on all other forms of labour. As India gets richer, labour will become more expensive, and servants will start to leave the home and go into other lines of work.
And at the same time we have zillions of labour-saving devices. As Bill Bryson points out in “Made in America” (which is about language, not inventions, but he goes off on tangents) in the 19th century, American inventors seemed primarily interested in inventing things that made people’s lives easier (washing machines, telephones, air conditioners, light bulbs, easy-to-use cameras) while European inventors were interested in mastering indsutrial processes. While he doesn’t connect it to servants, I can’t help but think tha the American obsession with inventing home gadgets might have had something to do with American homes being comparatively lacking in servants, especially among the middle class.