Economic Survey 2023-2024: Services - Fuelling Growth Opportunities

• The services sector continues to significantly contribute to India's growth, accounting for about 55 per cent of the total size of the economy in FY24. 
• As per the Provisional Estimates, the services sector is estimated to have grown by 7.6 per cent in FY24.
• The services Purchasing Managers’ Index (PMI) has remained above 50 since August 2021, implying continuous expansion for the last 35 months. In March 2024, services PMI soared to 61.2, marking one of the sector's most significant sales and business activity expansions in nearly 14 years.
• Globally, India’s services exports constituted 4.4 per cent of the world's commercial services exports in 2022. Post-pandemic, services exports have maintained a steady momentum and accounted for 44 per cent of India’s total exports in FY24.
• FY24 ended with an outstanding services sector credit of ₹45.9 lakh crore in March 2024, with a YoY growth of 22.9 per cent.
• Passenger traffic originating in Indian Railways increased by about 5.2 per cent in FY24 compared to the previous year. 
• Revenue-earning freight in FY24 (excluding Konkan Railway Corporation Limited) witnessed an increase of 5.3 per cent in FY24 over the previous year.
• The aviation sector in India has grown substantially, with a 15 per cent YoY increase in total air passengers handled at Indian airports in FY24.
• The tourism sector in India is expanding significantly. India's share of foreign exchange earnings in world tourism receipts increased from 1.38 per cent in 2021 to 1.58 per cent in 2022.
• The residential real estate market demonstrated a promising trend in 2023, with demand and new supply experiencing double-digit growth.
• Global Capability Centres (GCCs) in India have grown significantly, from over 1,000 centres in FY15 to more than 1,580 centres by FY23.
• The number of technology start-ups in India rose from around 2,000 in 2014 to approximately 31,000 in 2023.
• The Indian e-commerce industry is expected to cross USD 350 billion by 2030.
• Two significant transformations are reshaping India's services landscape: the rapid technology-driven transformation of domestic service delivery and the diversification of India's services exports.
• The emerging job demands in the services sector entail greater and more focussed skills. Focus areas should include Blockchain, Artificial Intelligence (AI), Machine Learning, Internet of Things, Cybersecurity, Cloud Computing, Big Data Analytics, Augmented Reality, Virtual Reality, 3D Printing, and Web and Mobile Development.
• A report by Capital Economics suggests that the advent of AI might moderate India's services export growth, potentially reducing it by 0.3-0.4 percentage points annually over the next decade. This highlights the significance of the relatively less skill-dependent tourism sector for employment generation. Consequently, public policy should focus on enhancing the tourism sector.
• Upskilling through government and industry collaboration can enable India to become a high-value partner in areas such as cybersecurity, enterprise management, and other specialised areas.

Chapter 12: Infrastructure – Lifting Potential Growth

• Buoyant public sector investment has had a pivotal role in funding large-scale infrastructure projects in the recent years.
• The average pace of NH construction increased by ~3 times from 11.7 km per day in FY14 to ~34 km per day by FY24.
• Capital expenditure on Railways has increased by 77 percent in the past 5 years, with significant investments in the construction of new lines, gauge conversion and doubling. 
• In FY24, new terminal buildings at 21 airports have been operationalised which has led to an overall increase in passenger handling capacity by approximately 62 million passengers per annum. 
• India’s rank in the International Shipments category in the World Bank Logistics Performance Index has improved to 22nd in 2023 from 44th in 2014. 
• The clean energy sector in India saw new investment of ₹8.5 lakh crore (USD 102.4 billion) between 2014 and 2023.
• UJALA Scheme resulted in an estimated energy savings of 48.42 billion kWh per year, GHG emission reduction of 39.30 million tonne CO₂ per year, and annual monetary savings of ₹19,335 crore in consumer electricity bills. 
• 945 km of metro rail or RRTS lines are operational, and 939 km are under construction in 27 cities. ~86 km of metro rail/RRTS lines operationalised in FY24.
• Under Jal Jeevan Mission (JJM), the provision of tap water connection has increased to more than 14.89 crore rural households (76.12 per cent).
• India has 55 active space assets which include 18 communication satellites, nine navigation satellites, five scientific satellites, three Meteorological Satellites, and 20 Earth Observation satellites.
• The total number of mobile towers in the country is 8.02 lakh as of June 2024 while number of Base Transceiver Stations (BTSs) stood at 29.37 lakh and 5G BTSs were 4.5 lakh. 
• The DigiLocker platform has now reached over 26.28 crore registered users and over 674 crore documents. 
• Khelo India programme: In FY2024, 38 new infrastructure projects were sanctioned, and 58 projects were completed.
• Given that infrastructure-creation efforts in India are currently predominantly public sector-led, a higher level of private sector financing and resource mobilisation from new sources will be crucial for India to continue down the path of building quality infrastructure. Facilitating this would not only require policy and institutional support from the Central Government, but State and Local Governments would have to play an equally important role.
• Existing databases fall short on assessing the demand for infrastructure and tracking the utilisation of facilities. The construction of an index that tracks the utilisation rates would shed light on sub-sectors where there is either an oversupply or a shortfall. 
• Statistics on the infrastructure sector can be derived from several available databases. However, aggregation of information - on both financial flows and physical progress - is difficult now. A roadmap and an action plan for systematic collection of information on infrastructure-oriented financial flows are essential.Similarly, project-wise and sector-wise information on physical progress, now maintained in different formats and frequencies, need to be reexamined and revised to facilitate a complete picture.