 "Economic Survey 2024-25 on India’s service sector: ‘New challenges for the old war horse’")
Finance Minister Nirmala Sitharaman presented the Economic Survey for the 2024-25 financial year on Friday.
India’s services sector remains a key driver of the country’s economic growth. The sector contributed around 55 per cent to the Gross Value Added (GVA) in the financial year 2024-25, according to the Economic Survey. The services sector maintained a robust growth rate of 7.6% in FY24.
The backbone of economic growth
Despite geopolitical challenges, services exports grew by 11.6 per cent in the first nine months of FY24-25. India is currently the seventh-largest services exporter worldwide.
Services sector exports have demonstrated resilience, while merchandise exports have witnessed moderation in recent months. They grew by 11.6 per cent in the first nine months of FY25 amidst unfavourable geopolitical conditions.
India ranks seventh globally, representing a 4.3 per cent share in global services exports.
Earlier, India was termed an agriculture-dominated economy. Now, after LPG reforms, India is said to be a service-led economy.
India’s services sector has consistently contributed the most to the economy. Its share in the total Gross Value Added (GVA) has grown from 50.6 per cent in FY14 to around 55 per cent in FY25.
Sector should put employees front and centre: Survey
A key suggestion in the report is for companies to prioritise the well-being and future of their employees above all else.
Service exports grew at an average rate of 11 per cent from FY14 to FY23. This growth increased to 12.8 per cent between April and November in FY25.
Passenger traffic originating in IR achieved a growth of 8 per cent over the previous year. Revenue-earning freight in FY24 achieved a growth of 5.2 per cent.
Impact Shorts
More ShortsSteady growth in tech and telecom
India’s tech industry earned USD 254 billion in FY24, growing 3.8 per cent year-on-year. Tech exports reached nearly USD 200 billion (3.3 per cent growth), while the domestic market grew by 5.9 per cent to surpass USD 54 billion. The sector added 60,000 jobs, bringing the total workforce to 5.43 million.
Global Capability Centres (GCCs) in India increased from 1,430 in FY19 to over 1,700 in FY24, employing nearly 1.9 million professionals.
India is the world’s second-largest telecom market, with 1.18 billion subscribers, 84 per cent teledensity, and 941 million broadband users.
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