Telangana tops India in services sector growth: NITI Aayog
HYDERABAD: Telangana has emerged as a leader in generating revenue from the services sector, which has become a key driver of India’s economic growth, according to a NITI Aayog report released in New Delhi on Tuesday.
Telangana’s services sector outpaces national average
The report, Indian Services Sector: Gross Value Added Trends and State-Level Dynamics, said the share of services in Telangana’s Gross State Value Added (GSVA) rose from 52.8% in 2011–12 to 62.4% in 2023–24 — well above the national average of 54.5%. The state’s average services share stood at 60.3%.
Hyderabad’s strong base in information technology, startups, real estate, professional services (average GSVA share 34.1%) and financial services (11.1%) has driven this growth, the report said. It noted that Telangana’s economy relies heavily on high-productivity, modern services.
Services account for over one-third of state employment
In 2023–24, 34.8% of Telangana’s workforce — around 62 lakh people — were employed in the services sector. The IT industry alone accounted for 12% of total employment. NITI Aayog suggested that Telangana should expand its IT strength to tier-II cities to play a key role in achieving the Viksit Bharat 2047 vision.
Andhra Pradesh lags behind
In comparison, Andhra Pradesh’s services share in GSVA increased from 40.9% in 2011–12 to 42% in 2023–24, remaining below the national average. About 31.8% of its workforce (78 lakh people) were employed in the services sector. The report advised Andhra Pradesh to strengthen its ports, agro-based services and logistics to boost growth.
Report calls for balanced, inclusive growth
NITI Aayog said the services sector’s growth is becoming regionally balanced, with even lagging states showing improvement. However, it cautioned that while modern services generate high incomes, they employ fewer people, whereas traditional services employ more but remain unorganised and low-paying.
Gender bias and regional disparities remain key employment challenges, the report noted. It recommended expanding social security for gig and self-employed workers, upskilling women and rural youth in digital skills, investing in skills for the new economy, and developing service hubs in tier-II and tier-III cities.
