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New Delhi [India]: The financial year (FY) 2024 ended with an outstanding services sector credit of Rs 45.9 lakh crore in March 2024, with a year-on-year (YoY) growth of 22.9 per cent, the Economic Survey revealed on Monday.
The services export post-pandemic times have maintained a steady momentum and accounted for 44 per cent of India’s total exports in FY24 the survey notes. India ranked fifth in services exports, with other countries being the European Union (excluding intra-EU trade), the United States, the United Kingdom, and China, the document stated.
The services Purchasing Managers’ Index (PMI) has remained above 50 since August 2021, implying continuous expansion for the last 35 months. In March 2024, services PMI soared to 61.2, marking one of the sector’s most significant sales and business activity expansions in nearly 14 years, according to the economic survey document.
India’s service sector continues to significantly contribute to India’s growth, accounting for about 55 per cent of the total size of the economy in financial year (FY) 24, the Economic survey revealed.
The services sector activities have continued to set new records, highlighting India’s leadership in digital payments globally. Services sales, particularly in international markets, experienced robust growth, supported by strong domestic demand and low inflationary pressures, as per a recent SBI report.
As per the Provisional Estimates, the services sector is estimated to have grown by 7.6 per cent in FY24.
The Economic Survey further states that the Government has played a crucial role in fostering the growth and competitiveness of India’s services by creating an enabling environment, promoting investment, enhancing skills and facilitating market access.
The contribution of the services sector to the overall GVA has increased significantly in the last decade. Globally, India’s services sector witnessed a real growth of more than 6 per cent and the services exports constituted 4.4 per cent of the world’s commercial services exports in 2022.
Globally, India’s services exports constituted 4.4 per cent of the world’s commercial services exports in 2022. Post-pandemic, services exports have maintained a steady momentum and accounted for 44 per cent of India’s total exports in FY24.
“Through the vicissitudes of the last three decades, the services sector stood as the bulwark of India’s economic growth. Aided by the focus on policy and procedural reforms, physical infrastructure and logistics, all significant business, personal, financial and infrastructure-based services have emerged strongly from the pandemic… However, the transformation lies in the fast-paced shift towards digital services like online payments, e-commerce, and entertainment platforms, as well as the increase in the demand for high-tech services as inputs in other productive activities,” as highlighted in Economic Survey 2023-2024.
The Economic Survey 2023-2024 was tabled in Parliament by the Union Minister for Finance and Corporate Affairs, Smt. Nirmala Sitharaman on Monday.