Services Sector Strategy in Economic Survey 2024-25
Why in the news
The Economic Survey 2024-25 called services the backbone of the economy and laid out a plan to strengthen the sector further.
Key facts
- GVA share: services moved up from 50.6% (FY14) to roughly 55% (FY25).
- Jobs: about 30% of workers are engaged in services.
- Servicification of manufacturing: services and factory production are merging, mostly between the production and post-production stages.
- Global Capability Centres (GCCs): 1,430 in FY19, above 1,700 in FY24, driven by skilled talent in banking, healthcare and automotive.
- Exports: India is 7th worldwide with a 4.3% slice of services exports, which has offset swings in merchandise exports.
Four-way sector strategy
| Category | Sub-sectors |
|---|---|
| Defend | IT and business services |
| Accelerate | Transport, trade, education, financial services |
| Transform | Travel, health, cultural and personal services |
| Untapped | Insurance, telecommunications, postal services |
Challenges
- Changing demand patterns and geopolitics create fresh risks for IT and professional services.
- Geoeconomic fragmentation is reshaping supply chains and could weaken India’s push for structural reforms and deregulation.
Way forward
- Skilling: as AI spreads, demand for digital and technical talent is rising; government, private sector and skilling bodies must work together.
- Simpler rules: easier regulations at the grassroots level for both manufacturing and services.
- Innovation: better administrative processes that support innovation in core industries and speed up growth.
Exam angle
- Document: Economic Survey 2024-25; services share about 55% of GVA.
- Which category covers insurance and postal services? Untapped.
- India’s rank in services exports: 7th (4.3%).
- Related term: GCCs, servicification of manufacturing.