Page 340 - economic_survey_2021-2022
P. 340

314     Economic Survey 2021-22

                Startups in India have grown remarkably over the last six years. The number of new
                recognised starups have increased to over 14,000 in 2021-22 from only 733 in 2016-17.
                As a result, India has become the third largest startup ecosystem in the world after the
                US and China. Further, a record 44 Indian startups have achieved unicorn status in 2021
                taking the overall tally of unicorns in India to 83, most of these are in the services sector.


             9.1  Services sector contributes over 50 per cent to India’s GDP. While Covid-19 pandemic has
             had an adverse impact on most sectors of the economy, the services sector has been the worst
             affected as its’ share in India’s GVA declined from 55 per cent in 2019-20 to 53 per cent in
             2021-22.  Within the services sector, the effect of Covid-19 has been varied. While non-contact
             services such as information, communication, financial, professional and business services have
             remained resilient, the impact has been much severe on contact based services such as tourism,
             retail trade, hotel, entertainment and recreation, etc.


             9.2  The services sector contracted by 8.4 per cent Year on Year (YoY) in 2020-21 (Table 1).
             This decline was driven by a sharp contraction of 18.2 per cent YoY in the sub-sector ‘Trade,
             hotels,  transport,  communication  & services  related to broadcasting’.  Owing to its contact
             intensive nature, the services included in this sub-sector had to bear the maximum brunt of the
             disruptions caused by the prevailing pandemic. The sub-sector ‘Public administration, defence
             & other services’ which includes expenditure by the government on one hand and services such
             as health, education, recreation etc, on the other, contracted by 4.6 per cent YoY in 2020-21.
             The relatively less contact intensive sub-sector ‘Financial, real estate & professional services’
             was the least impacted, with a marginal decline of 1.5 per cent  YoY in its GVA during 2020-21
             (Table 1).
             9.3  During the first half of the current fiscal year, the services sector has registered a steady
             recovery. Overall, the services sector grew by 10.8 per cent YoY in first half (H1) 2021-22
             (Table 1). A closer look at the quarterly estimates shows that Gross Value Added (GVA) in
             services sector (excluding construction) crossed its pre-pandemic level  in Q2 2021-22 (Table
             2, which compares the performance of quarterly GVA over the GVA in Q3 2019-20). The sub-
             sector ‘Trade, hotels, transport, communication & services related to broadcasting’, which was
             the worst hit last year, grew by 18.4 per cent YoY in H1 2021-22. However, the quarterly GVA
             of  this sub-sector is still below its pre-pandemic level (Table 2). On the other hand, GVA of
             ‘Public administration, defence & other services’ sub-sector witnessed a robust recovery. During
             H1 2021-22, the sub-sector grew by 12 per cent YoY, surpassing its pre pandemic level in
             Q2 2021-22 (Table 2). The ramping up of government expenditure in the wake of Covid-19 has
             contributed to the recovery of this sub-sector. Further, the sub-sector ‘Financial, real estate &
             professional services’ expanded by 5.8 per cent YoY in H1 2021-22, its GVA remained resilient
             throughout (Table 2).

             1 As per the Advance Estimates of 2021-22.
             2 Pre-pandemic level denotes Q3 2019-20 GVA
   335   336   337   338   339   340   341   342   343   344   345