Chandigarh, Delhi have highest share of services in GVA: NITI Aayog report

The report used 22 major states/UTs for the analysis. At the all-India level, the share of services in GVA stood at 54.5 per cent in 2023-24

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The share of services in gross value added (GVA) in 2023-24 was the highest in Chandigarh (88.8 per cent), followed by Delhi (84.1 per cent), said a NITI Aayog report released last week. This indicates that a state or union territory (UT), while having high per capita income, is also more services oriented.

 

“Richer states/UTs are also more likely to host dynamic, marketable services that drive long-term growth. Moreover, the link between income growth and services sector expansion is mutually reinforcing,” the report titled ‘India's Services Sector: Insights from GVA trends’, which used statistics ministry's data, noted. 

 

The report only used 22 major states/UTs for the analysis. At the all -India level, the share of services in GVA stood at 54.5 per cent in 2023-24.

 

In Chandigarh, the services sector is largely concentrated in ‘trade & repair services’ (35.4 per cent), followed by ‘real estate, ownership of dwellings & professional services’ (25.7 per cent), ‘financial services’ (15.9 per cent), ‘public administration’ (7.7 per cent), and ‘other services’ (6.8 per cent).

 

“The prominence of trade and repair reflects Chandigarh’s zoning-led urban planning, which has enabled specialised retail and service corridors catering to the Tri-City region of Chandigarh–Mohali– Panchkula. Its dual-capital role sustains demand for professional services such as legal, architectural, and engineering services,” added the report.

 

In Delhi as well, ‘real estate, ownership of dwellings & professional services’ contributed nearly 31 per cent, reflecting robust demand for commercial and consulting services. 

 

‘Financial services’ contributed 19 per cent — thus highlighting Delhi’s status as a national financial centre with the ‘transport & storage’ sector contributing 13.7 per cent. This underscores its logistical importance.

 

Among states, Karnataka has the highest share (62.3 per cent) of services in the gross state value added (GSVA), followed by Kerala (61.5 per cent) and Telangana (60.3 per cent).

 

‘Real estate, ownership of dwellings & professional services’ is the biggest contributor in the share of GVA of all these three states.

 

Surprisingly, Bihar (58 per cent) also has a high share of services in the GSVA, despite having very low per capita income.

 

For Bihar, trade & repair services’ (27.8 per cent) and ‘other services’ (20 per cent), led by small-scale neighbourhood retail outlets and self-employment, were the biggest contributors.

 

“This divergence suggests that the services sector in the state may be primarily characterised by lower productivity and more informal segments,” the report notes.

 

Meanwhile, Chhattisgarh (33.9 per cent) has the lowest share of services in the GSVA, due to the dominance of mining and mineral-based industries. The same is true for Odisha as services contribute only 38.2 per cent of the GSVA. 

 

Despite urban centres such as Indore and Bhopal emerging as hubs for information technology (IT), education, and real estate, the share of services in the GVA of Madhya Pradesh (38.8 per cent) remains low.

 

“Lower-income states, unless they invest in the right enablers, risk being locked into stagnant or low-return service structures,” the report said.

 

Gujarat (36.1 per cent), despite having high per capita income, has a low share of services in the GVA. This perhaps “stems from a policy that emphasises on industrial and port-led growth.”

 

The report by the NITI Aayog is among the first dedicated state-level assessments of output in the services sector, going beyond aggregate trends. It presents a disaggregated and multi-dimensional profile of the sector.

 

The report concludes that services are less tied to location than manufacturing — meaning that even geographically remote or landlocked states can benefit from this transformation.

 

“With the right investments in broadband, e-governance, and skill development, these states can leapfrog traditional industrial phases and move directly into modern, tradable, knowledge-based services,” it added.