Broad gains in India's services economy, with 13 sub-sectors posting double-digit growth in August

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Growth in India's services economy

Highlights

In August, 13 of India's 19 service sub-sectors recorded double-digit annual growth, led by a 19.9 percent increase in retail trade.
Strong growth of 11.2 percent to 17.6 percent was seen across key sub-sectors, including IT, banking, insurance, real estate, postal and courier services, and administrative services.
Air transport contracted 9.6 percent and arts and entertainment services declined 4.7 percent; the air transport index fell from 117.3 in January to 89.2 in August.

This article was translated from the original. Read the original version by our correspondent here.

Broad strength in August services data

According to Forbes India, the Trial Index of Services Production, or ISP, released on Thursday shows that 13 of India's 19 service sub-sectors recorded double-digit growth in August compared with a year earlier. Retail trade led with a 19.9 percent gain, followed by real estate and repair services at 17.6 percent, insurance at 16.5 percent and banking at 14.9 percent.

Other strong categories included professional, scientific and technical services, up 14.2 percent; IT and computer-related services, up 13.8 percent; postal and courier services, up 13.2 percent; and administrative and support services, up 13.1 percent. Accommodation and food services grew 11.9 percent, telecommunications 11.8 percent, warehousing and transport support 11.2 percent, and wholesale trade 10.2 percent.

Pressure on transport and entertainment segments

Growth was relatively moderate in some categories, including road transport at 9.4 percent, water transport at 9.5 percent, information and broadcasting at 7.2 percent, and rail transport at 3.7 percent. Even so, the overall figures point to broad-based momentum across the services sector.

The two underperforming sub-sectors were air transport and arts, entertainment and recreation services. Air transport contracted 9.6 percent, while arts, entertainment and recreation services declined 4.7 percent. Monthly figures show that the air transport index fell from 117.3 in January to 89.2 in August.

Our previous report discussed the need to make air travel more affordable in India's aviation sector and the impact of rising operating costs. It noted that higher fuel and route costs following the West Asia crisis put pressure on fares, while high prices could weaken demand and passenger traffic in a price-sensitive market.

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