The government’s expectation in the budget on Thursday that several high-frequency indicators about the state’s economy would lead to a significant improvement in the gross state domestic product (GSDP) in the coming financial year was on its way to a rapid V-shaped recovery . .
A V-shaped recovery is characterized by a quick and sustained recovery in economic performance following a sharp decline.
The socioeconomic outlook presented in the Legislative Assembly during the budget presentation stated, on an aggregate level, the high-frequency indicator suggested that economic activity was on a rebound in recent months. As the vaccine implementation program for COVID rolled, the state rebound was likely to be stronger. This will allow it to build on its strong core principles and drive its economy forward.
The shock of COVID-19 had adversely affected the economic growth all over the world but the economy of Telangana showed impressive resilience and recovery was already underway.
The resilience was led by agriculture and allied sectors, which grew to 20.9%, weakening the three percent growth at the national level. Although industry and service sectors contracted at 5.6% and 4.9% respectively, they outperformed much steeper packages nationally.
Due to its high growth rate, agriculture and allied sector contributed higher share in overall GSDP than any year since formation. However, at the aggregate level, the services sector continued to contribute the highest share.
The services sector contributed a 60.3% share in GSDP, exceeding the sector’s contribution of 54.3% at the all-India level in 2020-21. Sub-sectors within the services included trade and repair, personal software and IT, real estate, financial, transportation and contingencies.
The annual growth rate of services had outpaced the growth rate of the region at the national level. In addition, financial, real estate and professional services contributed more to the development of services in the state than in the country. IT was the largest sector in the group and a major driver of the state’s growth in Hyderabad was emerging as one of the world’s premier IT hubs.
The government attracted many large service sector companies through investment promotion efforts. Google, Microsoft and Amazon had their India headquarters in Hyderabad and other companies such as Facebook and IBM set up offices in the city.
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