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Hyderabad: Telangana, with an average services share of 60.3 per cent, represents a digitally oriented model centred on Hyderabad’s IT and startup ecosystem, according to NITI Aayog's report - India’s Services Sector: Insights from GVA Trends and State-Level Dynamics launched on Tuesday. It said the real estate, ownership of dwellings and professional services contributes 34.1 per cent, reflecting agglomeration around innovation corridors and sustained urban expansion. Legal, architectural, and consultancy services are clustered around Hyderabad’s IT hubs, supported by initiatives such as T-Hub, TASK, and T-Works. According to the report, trade and repair Services at 21.5 per cent, highlight the strength of retail networks and rising consumer demand, particularly post pandemic. Official data indicate a 20.8 per cent annual growth in trade and hospitality services in 2023–24, suggesting operational recovery and market expansion. The other services, contributing 12.9 per cent, include education, healthcare, and personal and community services. Though modest in Gross State Value Added (GSVA) share, this segment plays an important role in supporting social infrastructure and employment. Telangana’s services share in GSVA increased from 52.8 per cent in 2011–12 to 62.4 per cent in 2023–24, significantly exceeding the national average, reflecting growth aligned with digital infrastructure, IT exports, and professional services centred around Hyderabad’s Hitech City. Maharashtra sits at the threshold of this group, with an average services share of 56 per cent. The state’s services growth is anchored by its dual urban centres Mumbai and Pune, which have catalysed structural shifts toward finance, IT, real estate, and media services. Referring to State-level dynamics of the services sector, NITI Aayog’s report said India’s services-led growth has been geographically uneven but is expanding across regions. Karnataka, Telangana, Tamil Nadu, Kerala, and Maharashtra have emerged as major service-oriented economies, with services accounting for over half of their GSVA. These States benefit from urban centres, skilled workforce, and digital infrastructure, supporting growth in sectors such as IT, finance, real estate, and professional services. Union Territories, including Delhi and Chandigarh, report services shares exceeding 85 per cent, reflecting the dominance of urban economy and modern services. Encouragingly, several North-Eastern States, including Meghalaya, Manipur, Nagaland, and Arunachal Pradesh, have also recorded notable growth in services, while states such as Punjab, Haryana, Uttar Pradesh, West Bengal, Rajasthan, Andhra Pradesh, and Jharkhand show more moderate improvements. Services and State Income Patterns The report finds a strong association between the average share of services in GSVA and average State per capita income levels. States and UTs with more developed service economies, such as Delhi, Chandigarh, Karnataka, Telangana, and Maharashtra, tend to record higher per capita incomes, supported by activities in IT, finance, and professional services. The heterogeneity of the services sector is especially evident across Indian states, both in terms of scale and structure. States such as Karnataka, Maharashtra, Tamil Nadu, and Telangana have developed globally competitive hubs anchored in high-value, tradable, and knowledge-intensive services such as IT, finance, professional services, and digital platforms. Collectively, they contributed around 40 per cent of India’s total services output in 2023-24, the report added.
