- NITI Aayog report highlights Telangana’s rapid growth in services sector
- Hyderabad-led IT and financial services drive high GSVA share
Telangana has emerged as the top-performing state in service sector income, according to a new report released by NITI Aayog in Delhi on Tuesday. The report, which examined the structure, expansion, and employment patterns of India’s services economy, found that the state’s service sector has become the primary driver of its overall economic growth.
As per the NITI Aayog findings, the share of services in Telangana’s Gross State Value Added (GSVA) rose sharply from 52.8 percent in 2011–12 to 62.4 percent in 2023–24. This figure is significantly higher than the national average of 54.5 percent.
The report attributes this rise mainly to the robust growth of Hyderabad’s IT industry, startup ecosystem, real estate segment, and financial and professional services. The combined contribution of these sectors has averaged 34.1 percent of GSVA from professional services alone and 11.1 percent from financial services.
The report emphasized that Telangana’s economy is increasingly reliant on high-productivity, modern service-based industries. It further noted that approximately 34.8 percent of the state’s workforce—around 62 lakh people—was employed in the services sector in 2023–24.
The IT segment, which contributes 12 percent to the total workforce, continues to play a crucial role in creating jobs. NITI Aayog suggested that Telangana should extend its IT growth to tier-II cities to strengthen employment and support the national goal of achieving “Vikasit Bharat 2047.”
When compared to neighboring Andhra Pradesh, Telangana’s growth appears stronger. In Andhra Pradesh, the share of the services sector in GSVA increased only marginally—from 40.9 percent in 2011–12 to 42 percent in 2023–24—remaining below the national average.
Around 31.8 percent of the workforce in Andhra Pradesh, or nearly 78 lakh people, were employed in the services sector. The report recommended that Andhra Pradesh strengthen its ports, agricultural ancillary services, and logistics infrastructure to enhance economic growth.
NITI Aayog also noted that India’s services sector growth is becoming more regionally balanced, with even less-developed states showing progress. However, it warned that modern service industries generate higher income but employ fewer workers, while traditional sectors, though labour-intensive, continue to face low wages and informal working conditions.
The report identified gender inequality and regional imbalances as key employment challenges. It advised expanding social security for gig, MSME, and self-employed workers, providing women and rural youth with digital skills, and developing service hubs in tier-II and tier-III cities.
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