Growing in its significance, the Services Sector accounted for about 55 percent of the economy and Gross Value Added (GVA) growth, two-thirds of total FDI inflows into India and about 38 percent of the total exports. This was emphasized by the Economic Survey 2019-20, tabled in the Parliament today by the Union Minister for Finance and Corporate Affairs, Nirmala Sitharaman. The sector's share now exceeds 50 per cent of the Gross State Value Added in 15 out of the 33 states and UTs, the Survey further noted.
The Survey added that the services sector saw a 33 per cent jump in the gross FDI equity inflows during April - September 2019, touching US$ 17.58 billion. This was driven by strong inflows into sub-sectors such as Information & Broadcasting, Air Transport, Telecommunications, Consultancy Services and Hotel & Tourism, the Survey observed. The Survey underscored that services exports have outperformed goods exports in the recent years, due to which India's share in world's commercial services exports has risen steadily over the past decade to reach 3.5 per cent in 2018, twice the share in world's merchandise exports at 1.7 percent.
The Pre-Budget Survey also observed that various high-frequency indicators and sectoral data such as air passenger traffic, rail freight traffic, port and shipping freight traffic, bank credit, IT-BPM (Business Process Management) sector revenues, foreign tourist arrivals and tourism foreign exchange earnings suggest a moderation in services sector activity during 2019-20. However, on the bright side, Foreign Direct Investment (FDI) into services sector has witnessed a recovery in early 2019-20 and services exports have maintained their momentum during April-September 2019, the Survey suggests.
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