The survey also argued that India's sovereign credit ratings did not reflect its true fundamentals.
Despite the disruptions globally, foreign direct investment (FDI) inflows into India’s services sector grew a robust 34 percent year-on-year (YoY) during April-September 2020 to $23.6 billion, the Economic Survey 2020-21 pointed out.
This accounted for almost four-fifths of the total gross FDI equity inflows into India during this period. "The jump in FDI equity inflows was driven by strong inflows into the ‘Computer Software & Hardware’ sub-sector, wherein FDI inflows increased to $17.55 billion which is over 336 percent higher over the corresponding period last year," the survey said in the chapter titled Services.
"High growth in FDI inflows was also present in subsectors such as retail trading, agriculture services, and education," the survey said.
The survey said India’s services sector remained relatively resilient when compared to merchandise trade. "The sector provided a steady flow of current receipts even though exports from a few sub-sectors were adversely affected. Net services export receipts amounted to $41.67 billion in H1 of FY2020-21 as compared with $40.47 billion a year ago," the survey said.
India’s services export growth moderated to 2.5 percent in 2019-20 from 6.6 percent in 2018-19 as receipts were primarily on account of transportation, insurance and communication services.
"With contraction in global demand and implementation of COVID-19 induced lockdown measures, services exports declined by 7.87 percent in H1 of FY2020-21 as against a growth of 6.39 percent in the corresponding period of the previous year," the survey said.
India’s services imports exhibited sharper decline of 13.95 percent in the first half of FY2020-21 in comparison with services exports.
"Payments for all major services imports decreased on YoY basis. Among the major sectors, payments for overseas travel fell by 55.09 per cent due to restrictions on outbound travel from India," the survey said.
Payments for transport services (accounting for over 16 percent share in total services imports) recorded a 25.9 percent YoY decline in the first half of FY2020-21.
"Payment for imports of business services, which accounted for 43.41 per cent of total services imports, increased by 4.22 percent in H1 of 2020-21," the survey said.