The Information & Broadcasting (I&B) sector has attracted Foreign Direct Investment (FDI) worth $91 million between April and September 2021, shows the Economic Survey 2021-22 released by the Finance Ministry on Monday.
However, this is a significant drop from the $161 million worth FDI that the sector received in the same period in 2020. In 2019, the figure stood at $196 million.
In FY20-21, FDI stood at $314 million compared to $823 million in FY19-20, and $1.25 billion in FY18-19. The share of the I&B sector in Gross FDI equity inflows into the services sector in 2021-22 stood at 0.54%.
The economic survey also noted that the services sector contracted by 8.4% Year on Year (YoY) in 2020-21. This decline was driven by a sharp contraction of 18.2% YoY in the sub-sector ‘Trade, hotels, transport, communication & services related to broadcasting’. Owing to its contact intensive nature, the services included in this sub-sector had to bear the maximum brunt of the disruptions caused by the prevailing pandemic.
During the first half of the current fiscal year, the services sector registered a steady recovery. Overall, the services sector grew by 10.8% YoY in the first half (H1) of 2021-22. As per the survey, a closer look at the quarterly estimates shows that Gross Value Added (GVA) in the services sector (excluding construction) crossed its pre-pandemic level in Q2 2021-22, which compares the performance of quarterly GVA over the GVA in Q3 2019-20.
The sub-sector ‘trade, hotels, transport, communication & services related to broadcasting’, which was the worst hit last year, grew by 18.4% YoY in H1 2021-22. However, the quarterly GVA of this sub-sector is still below its pre-pandemic level.
The services sector as a whole has mostly recovered from the impact of the nationwide lockdown imposed during March-May 2020 and localised lockdowns during the second Covid wave in April-May 2021, although some of the sub-sectors continue to be impacted.
As per the first advanced estimates, GVA of the services sector is estimated to grow by 8.2% in 2021-22 while the sub-sector ‘trade, hotels, transport, communication & broadcasting services’ is estimated to expand by 11.9 per cent in 2021-22. A part of this growth is attributable to the low base in 2020-21.