Hyderabad, October 31: Telangana has cemented its position as one of India’s fastest-growing service-driven economies, with the sector now contributing 62.4 percent to the state’s Gross State Value Added (GSVA), according to NITI Aayog’s latest State Economic Performance Report. The data reflects a remarkable structural transformation — from a primarily agriculture and manufacturing-based economy to one led by knowledge, innovation, and digital services.
Between 2011–12 and 2023–24, Telangana’s services share surged from 52.8 percent to 62.4 percent, outpacing the national average of roughly 54.5 percent. Economists say the state’s capital, Hyderabad, has been the driving force behind this growth, thanks to its thriving IT, financial services, and start-up ecosystem.
The Engine: Hyderabad’s Innovation and Digital Ecosystem
Hyderabad’s transformation into a global technology and services hub is at the core of Telangana’s success.
Flagship initiatives like T-Hub, T-Works, and TASK (Telangana Academy for Skill and Knowledge) have nurtured thousands of start-ups and skilled professionals, helping the state attract investors and multinational corporations.
“Telangana has effectively positioned itself as a next-generation service economy — one that combines digital innovation, human capital, and forward-thinking governance,” said a senior NITI Aayog official quoted in The Times of India report.
Real estate, professional services, and IT collectively account for over 34 percent of the state’s service output, while trade and repair services contribute around 21.5 percent, supported by a robust retail and consumer services market.
Employment and Urban Growth
Telangana’s service-led growth has been a major source of jobs. The sector now employs 34.8 percent of the state’s workforce — well above the national average of 29.7 percent.
Urban centers like Hyderabad dominate this figure, with two-thirds (66.6 percent) of urban workers engaged in service-based employment, compared to just 18.9 percent in rural areas.
Economists note that while the trend underscores Hyderabad’s economic dominance, it also highlights the need to spread growth more evenly across Tier-II cities like Warangal, Karimnagar, and Khammam.
Policy, Governance, and Investments
Telangana’s service-sector success has been underpinned by policy consistency and investor-friendly governance. The state’s TS-iPASS single-window clearance system, strong digital infrastructure, and urban development focus have accelerated business activity and foreign investment inflows.
“Telangana’s model demonstrates how proactive policies can translate into measurable economic transformation,” said Dr. Meera Sinha, an economist specializing in regional development. “It is a blueprint for other Indian states aiming to harness urban innovation for broad-based growth.”
Challenges Ahead: Inclusivity and Sustainability
Despite its achievements, Telangana faces critical challenges. Gender disparities remain — only 23.9 percent of women are employed in services compared to 41.5 percent of men. Rural participation in high-value service jobs also remains limited.
Experts emphasize that bridging these gaps and ensuring the quality of jobs — through formal employment, social security, and skill upgradation — will determine whether the growth can be sustained.
Another key priority, according to analysts, is diversifying the economic base beyond services to strengthen manufacturing and agri-linked services, ensuring resilience against sector-specific slowdowns.
The Road Ahead
Looking forward, the Telangana government aims to replicate Hyderabad’s success in secondary cities through infrastructure expansion, digital connectivity, and localized innovation clusters.
As India moves deeper into a service-led growth era, Telangana stands as a model of how urban innovation, skill development, and smart policy can converge to build a resilient and globally competitive economy.
“From IT corridors to fintech startups and research labs, Telangana’s journey reflects a shift from industrial growth to intellectual growth,” observed policy analyst Ravi Shankar Rao.
“It’s no longer just ‘Brand Hyderabad’ — it’s becoming ‘Brand Telangana’.”