Economic Survey flags services as backbone of growth, urges skills and innovation push

New Delhi, [India] January 29 (ANI): India's services sector continues to be the main driver of economic growth, contributing over half of the country's Gross Value Added (GVA) and playing a critical role in employment generation, exports, and investment, noted the Economic Survey laid in Parliament by Finance Minister Nirmala Sitharaman.
The Survey states that the services sector has shown remarkable resilience amid global economic uncertainty and is now transitioning from traditional growth drivers to emerging high-value segments.
According to the Survey, India's services sector has consistently outperformed other sectors in recent years, supported by strong domestic demand, digital transformation, and expanding global linkages.
The Economic Survey highlights that global trade in services has grown faster than merchandise trade over the past decade, with knowledge-intensive services such as IT, business services, finance, and professional services driving expansion.
India has strengthened its position as a leading global exporter of services, particularly in IT and digitally delivered services. The Survey notes that India remains among the top global exporters of commercial services, benefitting from a skilled workforce, cost competitiveness, and technology adoption.
The growing importance of digital public infrastructure and cross-border data flows has further enhanced India's competitiveness in global services markets, it added.
The Survey observes that India's services sector recorded steady growth in the post-pandemic period, supported by recovery in contact-intensive segments such as tourism, hospitality, transport, and trade.
High-frequency indicators, including GST collections, e-way bills, air passenger traffic, and hotel occupancy rates point to sustained momentum in services activity.
The sector has also attracted the highest share of foreign direct investment (FDI), reflecting continued investor confidence in India's growth prospects.
The Economic Survey notes that while IT and IT-enabled services remain central, newer areas are increasingly contributing to growth.
Financial services have expanded with deeper digital penetration and increased formalisation. Real estate and construction-linked services have gained from urbanisation and housing demand, while logistics and transport services have benefited from infrastructure expansion and policy reforms.
Tourism and travel services have seen a sharp revival, aided by rising domestic tourism and improved connectivity.
The Survey also underlines the growing role of emerging services such as fintech, health services, education services, research and development, and global capability centres (GCCs).
Looking ahead, the Economic Survey emphasises the need to strengthen skill development, promote innovation, and enhance regulatory frameworks to sustain services-led growth.
It calls for leveraging digital technologies, improving ease of doing business, and deepening India's integration with global services value chains.
The Survey notes that with supportive policies and continued investment in human capital and technology, India's services sector is well placed to move from stability towards new growth frontiers and remain a cornerstone of the country's economic transformation. (ANI)