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Service Sector

India's services sector is a key contributor to its GDP, accounting for 55.39% of total GVA in FY21 and showing significant growth in recent years. The sector's GVA increased from Rs. 68.81 trillion in FY16 to Rs. 101.47 trillion in FY20, with notable growth in financial, real estate, and professional services. However, the sector faced challenges in May 2021, as indicated by a decline in the Services Business Activity Index due to COVID-19 restrictions.

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Mahi Mehta
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10 views1 page

Service Sector

India's services sector is a key contributor to its GDP, accounting for 55.39% of total GVA in FY21 and showing significant growth in recent years. The sector's GVA increased from Rs. 68.81 trillion in FY16 to Rs. 101.47 trillion in FY20, with notable growth in financial, real estate, and professional services. However, the sector faced challenges in May 2021, as indicated by a decline in the Services Business Activity Index due to COVID-19 restrictions.

Uploaded by

Mahi Mehta
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Introduction

The services sector is not only the dominant sector in India’s GDP, but has also attracted significant
foreign investment, has contributed significantly to export and has provided large-scale
employment. India’s services sector covers a wide variety of activities such as trade, hotel and
restaurants, transport, storage and communication, financing, insurance, real estate, business
services, community, social and personal services, and services associated with construction.

Market Size

Share of the services sector accounted for 55.39% of the total GVA in FY21. India’s services sector
GVA increased at a CAGR of 11.43% to Rs. 101.47 trillion (US$ 1,439.48 billion) in FY20, from Rs.
68.81 trillion (US$ 1,005.30 billion) in FY16. Between FY16 and FY20, financial, real estate and
professional services augmented at a CAGR of 11.68% (in Rs. terms), while trade, hotels, transport,
communication and services related to broadcasting rose at a CAGR of 10.98% (in Rs. terms).

According to RBI, in April 2021, service exports stood at US$ 21.17 billion, while imports stood at US$
10.61 billion.

The India Services Business Activity Index/ Nikkei/IHS Markit Services Purchasing Managers' Index
fell to 46.4 in May 2021 from 54.0 in April 2021, as output and new orders declined due to COVID-
19-induced restrictions to contain the spread of coronavirus.

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