Service Sector in Punjab

Table of Contents

What is the Service Sector?

The term “service sector” refers to an economic sector that produces intangible goods that provides a service for satisfying a need, unlike Agricultural and Industrial products. Activities in the Service sector include Banks, Hotels, Real Estate, Education, Health, Social Work, Media, Communications, Electricity, etc. In a globalized era, the service sector is expanding and is able to generate employment and income.

The Services sector is the largest contributor to the State’s GVA among all the sectors of the economy. Punjab’s economy over a period of time moved from being predominantly an agrarian economy to a service sector driven economy. Increasing income entails the demand for services like transport and communication, banking, tourism, etc. Consequently, the share of the services sector in the economy’s output grows.
The services sector contributed 45.9% to Punjab’s GVA in 2023-24(A) and employed 41% of the total workforce in 2022-23. The rate of growth of services GSVA’ with an average of 6.1% outpaced that of the overall GSVA growth rate (4.8%). During the same period, trade, repair, hotels and restaurants witnessed the average annual growth rate of 5.6%, whereas real estate, ownership of dwellings and professional services grew by 5.8%.
Along with the above sector, transport, telecom and financial services form an integral part of the services economy within the state.

Trade, repair, hotels and restaurants employ the highest percentage of workforce within the services sector.
Widely acknowledged as the cradle of civilization, Punjab is known for its ethnic and cultural wealth. With its temples, forts, memorials, museums, fairs and festivals, Punjab has a lot to offer to tourists. Amritsar accounts for about 51% of the total tourist footfall in Punjab.
On the telecommunication front, the sector is well developed in the state with wireless tele-density and percentage of internet subscribers being more than the national average.

S No.	Sector	Share (in %) 2023-24 (А)	Growth
S No.	Sector	Share (in %) 2023-24 (А)	2021-22 (Р)	2022-23 (Q)
1	Trade & Repair Service	19.7 %	8.7 %	6.7 %
2	Hotel & Restaurants	1.4 %	10.2 %	8.7 %
3	Transport, storage, Communication de Service related to broadcasting	12.8%	10 %	8.3 %
4	Financial Services	9.9 %	4.2 %	5.6%
5	Real Estate, Ownership of dwellings de Professional Services	20.3 %	4.3%	5.1 %
6	Public Administration	12.8 %	9.0 %	9.0 %
7	Other Services	23.3 %	8.5 %	8.1 %