Govt to launch full service sector survey from Jan 2026; pilot shows domination of larger firms

Large service sector firms dominate output and formal service economy

Starting 2026, India will have detailed data on the contribution of formal services sector firms to the economy and employment, just like that for the industrial sector.

The statistics ministry said on April 30 that it plans to launch the full-scale organised service sector survey from January 2026, on the lines of studies done for organised industrial enterprises and unorganised firms.

The data will be vital as the services sector has an over 60 percent share in the Indian economy.

The ministry conducted a pilot last year using Goods and Services Tax Network data as a frame to recognise enterprises.

The study found that larger firms, valued at Rs 500 crore or more, contributed over 60 percent to the services economy.

The study, which took into account results from 4,086 service enterprises, found that while firms with output of Rs 500 crore or more accounted for just 3 percent of the universe of listed entities that responded to the survey. They had a 62.3 percent share of capex spend and 69.5 percent share of gross value added (GVA).

Their share in employment was less pronounced at 37 percent, while firms with Rs 100-500 crore output had a 33.7 percent share.

In terms of compensation, larger firms performed better. Larger companies had a 63.2 percent share of compensation paid and large firms (Rs 100-500 crore) a 22 percent share.

Smaller companies, which were over half of the surveyed firms, only accounted for 2.6 percent of assets, 2.4 percent of capex and 1.2 percent of output. The study classifies smaller firms as those with an output of less than Rs 10 crore.

Service sector firms are classified into three categories — construction, trade and other services.

Among them trade firms tend to have more offices than construction and other service firms.

“28.5 percent of enterprises reported having additional places of business within the state. This percentage was observed to be the highest in the trade sector with around 41.8 percent of enterprises belonging to this sector reported additional places of business in the state,” the ministry said.

The statistics ministry changed the timeframe for its other surveys like the Annual Survey of Industries and Annual Survey of Unorganised Sector Enterprises from January to December.

Recently, it released the results of a capex survey, which indicated that private sector capex likely rose 66 percent between FY22 and FY25.