Service sector

Services sector most affected due to Covid; Financial and housing rebound to pre-pandemic levels: economic survey

New Delhi: Minister of Finance of the Union Nirmala Sitharaman filed the Economic survey 2021-22 in Lok Sabha before Union budget Monday. The economic survey said the services sector has been hardest hit due to the Covid-19 pandemic, but financial, real estate and professional services have now recovered and are back to where they were before the pandemic. .

The services sector as a whole has largely recovered from the impact of the nationwide lockdown imposed during the first wave of covid pandemic.

During the first half of 2021-2022, the service sector would have increased by 10.8%. However, the overall gross value added (GVA) of the services sector is expected to increase by 8.2% in 2021-22.

“High frequency indicators such as the Services Purchasing Managers Index, Air Freight and Rail Freight bottomed out in 2020. The impact of the second wave of covid in April-May 2021 on these indicators was much weaker than during the full lockdown in March-May 2020,” says the economic survey released by the Center.

According to the Economic Survey, domestic air and rail passenger traffic is also gradually increasing. The global problem of container shortage is impacting port traffic.

Services exports, after the initial slump in the first three quarters of 2020-21, exceeded their pre-pandemic level in the fourth quarter of 2020-21, according to the economic survey released on Monday.

He also mentioned that in the first half of 2021-2022, the service sector received over $16.7 billion in FDI, which accounts for almost 54% of the total FDI inflows in India, according to the survey.

Startups in India have seen remarkable growth over the past six years. The number of newly recognized startups rose to more than 14,000 in 2021-22 from just 733 in 2016-17, the economic survey released by the Center found.

IMPACT OF COVID-19 AND SEQUENTIAL RECOVERY

The services sector contracted by 8.4% year-on-year (YoY) in 2020-21. The decline was driven by a sharp contraction of 18.2 percent year-on-year in the “Trading, hospitality, transportation, communication and broadcasting-related services” sub-sector, it said.