A state of uncertainty is gripping over many services sectors, including financial services, software, outsourcing, civil aviation and real estate, due to the global financial crisis, credit crunch and higher interest rates during the recent months, according to a survey by the Federation of Indian Chambers of Commerce and Industry.
The feedback gathered from industry shows that while during the first half of current fiscal (April-Sept 2008) there was moderation in the growth of several segments of the services sector, from October 2008 onwards a marked deterioration in performance was seen in many areas.
The survey is based on the interaction with over 250 representatives of various service-related industry associations, organisations, and companies in both the private and public sector.
Despite the global economic slowdown, India's services sector has shown some resilience with 12 of the 31 segments surveyed by Ficci recording a 'high' to 'excellent' growth rate ranging between 10 per cent and over 20 per cent during April-November 2008.
In 2007-08, 26 segments of the services sector recorded this order of growth.
Although the slowdown is expected to make a further dent in the growth of some segments of the services sector, given its overall contribution of 63 per cent to GDP, the services sector growth is expected to help maintain a healthy GDP growth this fiscal.
According to the Ficci Services Sector Survey, Wireless subscribers grew by 50 per cent in April-November 2008 compared with corresponding period of the previous year.
In fiscal 2007-08, the growth was 58 per cent compared with the previous year. Internet subscribers grew by 26 per cent (20 per cent), and broadband subscribers by 87.7 per cent (23.6 per cent). Figures in bracket refer to growth in year-ago period.
A few services that have seen a high growth of 10 per cent to 20 per cent in April-November 2008 are: Railway revenue earning passenger traffic 12.2 per cent (14 per cent), revenue earning railway freight traffic 15.7 per cent (14 per cent), housing finance 12 per cent (12 per cent), entertainment & media industry 10 per cent (16 per cent), IT/software/software services 15 per cent (33 per cent) and organised retail trade 15 per cent (30 per cent).