A CII-KPMG Report shows Services Sector growing at 10% annually, contributing 61% to India’s GDP

A CII-KPMG report released today shows that the Services sector contributed about 61 per cent to India’s GDP in the year 2014-15, thereby making India the second fastest growing services economy in the world.

Moreover, it has also been showing strong growth of approximately 10 per cent per annum. The report also cites the key services sectors which are driving this growth - IT, telecom, tourism, media and entertainment, healthcare, management consulting, logistics and professional services.

Both, this report and the World Bank finding that this sector is contributing in poverty alleviation more than agriculture and manufacturing, has proven that Services is increasingly becoming critical to the development trajectory of our country.

Rajat Wahi, Partner and Head, Consumer Markets, KPMG in India, said, “India’s young demographic profile combined with its rising literacy rate, offers it a significant competitive advantage vis-à-vis other developing economies. Along with the ‘Make in India’ initiative that is striving to boost the manufacturing sector, the Prime Minister has outlined a vision to represent India as a world-class services hub across sectors. Multiple stakeholders need to work cohesively to help achieve this vision.”

He further added, “Technology, innovation and creativity are rapidly redefining the global economy with digitization collapsing distances and transcending borders. In the process, the impact of the services sector is turning out to be manifold and significant. India has pride of place as the fastest-growing service sector nation globally. To keep the momentum going, it is critical that stakeholders, investors and policy-makers are best equipped in strategizing for the future and tapping the best markets globally.”

Notably, India’s share in global services exports was 3.2 per cent in 2014-15, double that of its merchandise exports in global merchandise exports at 1.7 per cent, placing India in the eighth place currently amongst the top ten exporters of service in the world.

(Image credits: NYTimes)