India's services economy stays resilient as 17 sectors post growth

In August, India's services sector demonstrated broad-based growth, with 17 out of the 19 monitored sectors expanding and 13 achieving double-digit gains, according to the latest data released by the statistics and programme implementation ministry. The trial Index of Service Production (ISP) revealed that retail trade, real estate, repair services, insurance, and banking were among the sectors experiencing the most rapid growth in August.

The CareEdge Ratings estimates indicate that services output climbed by 14% year-on-year in August, up from 13.5% growth in July. However, the ministry has not yet disclosed the headline ISP growth figure. Rajani Sinha, the chief economist at CareEdge Ratings, noted that the positive performance in the services sector is consistent with the overall resilience and strong momentum observed across the broader economy.

This is evidenced by indicators such as bank credit growth, GST collection, automobile sales, and e-way bills, as reported by Sinha.

Industrial activity also remained robust, with the Index of Industrial Production (IIP) recording a growth rate of 7.3% in the second quarter of the current financial year. In August, the retail trade sector led the services sector growth, expanding by 19.9% year-on-year, compared to 18.5% growth in July. Repair services and real estate followed suit, both recording 17.6% growth.

Insurance output saw a 16.5% increase year-on-year, while banking grew by 14.9%. Professional, scientific, and technical services, encompassing research and development, expanded by 14.2%, while IT and computer-related services grew by 13.8%, and administrative and support services expanded by 13.1%.