India Services Sector Surges 13.1% in June: Economic Rebound
By ThePip Desk
India’s services sector rebounds strongly with 13.1% growth in June, fueled by real estate and IT, indicating robust economic activity and recovery.
India’s services sector output experienced a significant recovery in June, with growth reaching 13.1% after a slowdown in May. This upturn highlights a rebound in economic activity, as reported by the Ministry of Statistics and Programme Implementation.
Key Economic Indicators
The services sector recorded 13.1% growth in June, a notable increase from the 9.5% observed in May. This follows a robust 20.1% growth documented in April.
Eight of the 19 sectors tracked by the ISP achieved double-digit year-on-year growth in June. The overall services sector expanded by 10% from April to June, though this was slower than the 11.5% seen in the preceding quarter.
Understanding the Services Production Index
The Ministry of Statistics and Programme Implementation (MoSPI) compiles the trial Index of Services Production (ISP) to gauge the health of various service industries.
This index provides a weighted average growth across 19 distinct services sectors, which collectively represent approximately 60% of India’s formal services economy.
Sectoral Performance Highlights
The June recovery was propelled by strong performances in several segments. Real estate led this expansion with an impressive 24.7% growth.
Other significant contributors included retail trade, which saw an 18% increase, and wholesale trade, expanding by 15.1%. Additionally, Information technology and computer-related services, holding the largest ISP weight at 22.5%, grew by 13.5% in June, up from 10.3% in May.
Conversely, air transport was the only sector to experience a contraction, falling by 6% year-on-year in June. This decline was steeper than the 2.8% contraction recorded in May.
Expert Confirmation
Rajeev Sharan, head of research at Brickwork Ratings, confirmed that the June ISP data serves as a directional cross-check, affirming the underlying strength of the services sector.
This assessment underscores the crucial and growing contribution of the services sector to India’s overall economic performance and stability.