Economic Survey 2015: Services sector to clock double-digit growth of 10.6% in FY15

NEW DELHI: The Economic Survey for 2014-2015 said that India's services sector clocked double digit growth rate of 10.6 per cent as per the Advance Estimate during the current financial year, as compared to 9.1 per cent in the last fiscal (FY 2013-14).

"Contributing almost 72.4 per cent of the growth in the GDP, in the year 2013 India had the second fastest growing services sector, next only to China," the survey notes.

The Economic Survey notes that this sector accounts for more than half of India’s Gross Value Added (GVA) growth and including Construction, a borderline Service, the Services share is 59.6 per cent with a growth rate of 8.1 per cent.

The services sector also has the highest share of 54.6 per cent in the Gross Capital Formation (GCF) of Rs. 35.4 lakhs in 2013-14. The growth rate of services GCF at 3.1 per cent has also been higher than the total GCF growth of 1.4 per cent, offsetting the negative GCF growth in agriculture, industry and manufacturing.

The 10.6 per cent estimated growth in the services sector is mainly due to better performance in financial, real estate and professional services besides public administration, defence and other services. There was also good growth in trade, hotels, transport, communication and related services.

The services Sector also continues to dominate the FDI equity inflows into the country. During 2014-15 (April to November), the FDI inflows into services grew by 105.8 per cent compared to 22.2 per cent growth in overall FDI inflows.

In the first half of 2014-15, Services exports grew by 3.7 per cent to $75.9 billon while import of Services grew by 5.0 per cent to $39.9 billon, resulting in net Services growth of 2.4 per cent.