Service Sector dominates economy of Bangaru Telangana

​Service Sector

The Services sector comprises trade & repair services; hotels & restaurants; transport, including railways, road, water, air & services incidental to transport; storages; communications & services relating to broadcasting; financial services; real estate, ownership of dwellings & professional services; public administration, and other services. This sector is a dominant sector of the State’s economy in terms of contribution and growth in GSDP. The contribution of Services sector is estimated to be around 60.5% of total GVA for the year 2015-16 as per the Advance Estimates at constant (2011-12 ) prices. The services sector is the largest employment provider in urban areas as 62.3 percent of the total urban workforce was dependent on this sector for employment in 2013-14.

Sustaining growth momentum in this sector at present level is important for following reasons:

(i) employment elasticity in some of the sub-services sector such as tourism, real estate sector are high and waiting to be tapped,

(ii) there has been an increase in the number of highly skilled professionals in the State seeking employment in the sector

(iii) the growth of services sector is important for the burgeoning urban population in the State, which is at 38.88 percent, at present.

Structure and Performance of Services Sector

Major services in the State include real estate, ownership of dwelling & professional services (including ITeS), and trade, repair, hotels and restaurants etc. Real estate, ownership of dwelling & professional services account for about one-third of total services sector GVA in the State, followed by trade, repair, hotels & restaurants (22%) and other services (14%). Details of sub-services sector contribution are given in Figure 5.1.

Growth in Services Sector using average annual growth rate reveals that most of the sub-sectors in services have registered a double digit growth during period 2012-13 to 2015-16. The public administration sector experienced the highest growth (AAGR of 12.65 percent) during 2012-13 to 2015-16. Other services that grew at double-digit are communication (10.34%), Real estate (11.54%) and trade, repair, hotels and restaurants (10.29%) during the same period.

Table 5.1: Growth in Sub-Services Sector GSDP during 2012-13 to 2015-16

Sl No	Sub-sectors of Tertiary Sector	Average Annual Growth Rate (AAGR)
I	Trade, repair, hotels and restaurants	10.29
a	Trade & repair services	11.98
b	Hotels & restaurants	2.54
II	Transport, storage, communication & services related to broadcasting	7.95
a	Railways	2.15
b	Storage	1.73
c	Communication & services related to broadcasting	10.34
III	Financial services	7.96
IV	Real estate, ownership of dwelling & professional services	11.54
V	Public administration	12.65
VI	Other services	8.16
Tertiary		9.87

Note: GVA figures are at a basic price in a 2011-12 base year.

Companies doing business in Services:

As Services sector includes diverse activities and is regulated by different departments of State and Central Governments it is difficult to provide comprehensive information on this sector. While information on unorganised services such as laundry, barbers, pot making, goldsmith, blacksmith, weaving etc., are not available annually, data on services relating to the organised sector such as enterprises which are registered as companies is available with the Ministry of Corporate Affairs. By using the same, the performance of services sector is assessed. Companies which filed their annual returns and profit and loss account with MCA-21 for the year 2014-15 (as on 21.01.2016) is considered for the analysis.

Note: Number of companies and turnover is based on annual filing done with MCA-21 of the Ministry of Corporate Affairs for 2014-15.

There are about 10,085 companies in the State doing business in the services sector, whose turnover was Rs. 89,257 crore in 2014-15. The majority of the sub-services sectors in the State include business services (which predominantly consist of IT & ITeS companies), real estate and renting, trading, finance, insurance etc. In terms of a number of companies and turnover, business services (IT&ITeS etc.) stands first; there are about 5,470 business services companies in 2014-15 with the turnover of Rs. 41,488 crore, followed by community, personal & social services, trading etc.

G.Rajendera Kumar