Visakhapatnam: The services sector contributed 42.3 per cent to the gross state value added (GSVA) of Andhra Pradesh between 2011-12 and 2023-24, well below the national average of about 55 per cent, according to a recent report by Niti Aayog. This highlights a stronger dependence on agriculture and industry in Andhra Pradesh compared with more urbanised, service-driven states.According to the report titled ‘India services sector: insights from GVA trends and state-level dynamics’, Chhattisgarh leads with an 88.8 per cent services share, followed by Delhi at 84.1 and Karnataka at 62.3, supported by strong financial, real estate, and administrative services. Telangana recorded a higher services share of 60.3, reflecting the information technology and commercial strength of Hyderabad. Experts suggest that strengthening urban infrastructure, professional services, and financial institutions could help Andhra Pradesh expand its service GSVA and align with national trends. Within the state, real estate, ownership of dwellings, and professional services form the largest component, contributing 19.6 per cent of total service GSVA. This reflects the strength of urban housing, property-related activity, and professional consultancies, though it remains well below Karnataka (50.8 per cent), Maharashtra (35.6), and Telangana (34.1). The trade and repair service subsector ranks second at 17.7 per cent, supported by retail trade, logistics, and local consumption in Visakhapatnam and Vijayawada. Other services, including education, health, recreation, and community activities, contribute 17.8 per cent, representing an employment-intensive but low-productivity segment. Public administration forms about 13 per cent, reflecting large govt employment and expenditure across districts. Financial services contribute 6.1 per cent, far below the national average of 11 per cent, indicating limited banking, insurance, and fintech penetration. The transport and storage sector adds about 9 per cent, driven by port infrastructure in Visakhapatnam, Krishnapatnam, and Kakinada. Communication and broadcasting account for roughly 3 per cent, showing slower digital growth, while hotels and restaurants contribute around 3 to 4 per cent, largely tied to tourism in Visakhapatnam, Vijayawada, Tirupati, and Araku. A review of yearly trends show that the services share of GSVA has increased only modestly over the past decade in Andhra Pradesh, suggesting a gradual shift from an agriculture-industry economy. Regionally, Andhra Pradesh services share in GSVA (42.3 per cent) trails Telangana (60.3), Kerala (61.5), Tamil Nadu (51.7), and Karnataka (62.3). Although Andhra Pradesh records a higher share in other services (17.8 per cent) than Telangana and Karnataka, these activities add relatively low value. The state’s service economy is therefore broad but shallow, dominated by real estate and trade, with limited digital and financial depth. Former Andhra University rector Prof M Prasada Rao said Andhra Pradesh stands at a strategic turning point. “If the state strengthens human capital, attracts financial and digital enterprises, and modernises urban infrastructure, it could bridge the gap with the national average and match the performance of its southern peers. Such diversification would enhance GSVA and make growth more resilient, inclusive, and employment-oriented,” said Prof Rao.
