Services growth improved in FY10 on govt support: CII

With government's support, the service sector, accounting for about 55 per cent in India's economy, has revived from slowdown and maintained growth trends during 2009-10 over the year ago period, CII said.
    
Telecom and mutual fund industry have emerged as the biggest contributors in the growth of services industry both recording excellent growth rates, a survey by CII said.
    
"The services sector has performed better during 2009-10 over 2008-09 mainly on the back of the stimulus package provided by the government," it said.
    
In the Budget, the government has continued the 10 per cent service tax benefit for the sector. Earlier, the Centre had taken several measures, including increased public expenditure to prop up the economy against the impact of global demand slowdown.
    
The study is based on responses of 350 entities in both the private and public sectors.
    
Of the 51 sectors surveyed, 13.72 per cent recorded excellent growth of more than 20 per cent in 2009-10. This is an improvement over 2008-09 when only 5.88 per cent of the sectors recorded excellent growth rate.
    
The share of sectors registering high growth has also increased to 43.13 per cent in the last fiscal from 41.17 per cent in the previous year. While the share of moderate growth rate sectors increased from 35.29 per cent to 41.17 per cent indicating substantial improvement.
    
Sectors recording negative growth rate has significantly declined to 1.96 per cent from 17.65 per cent.
    
The high growth category (10 to 20 per cent) includes air passenger traffic, retail trade, advertising, courier and logistics and live entertainment.
    
The industry chamber has underlined some pro-active reform measures, including a policy statement for modern retail while allowing foreign investment in the segment and early implementation of Goods and Services Tax regime.