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Private limited companies dominate formal services, says NSO study
About 83 per cent corporate services entities were private limited companies during 2022-23 (FY23), shows a pilot study, the first of its kind, of India's services sector, conducted by the National Statistics Office (NSO).
The results of the study were released on Wednesday.
The trend is noticeable for all the broad categories, ie construction, trade, and other services.
The survey, titled 'Pilot Study on Annual Survey of Services Sector Enterprises (ASSSE)', was conducted in two phases -- between May 2024 and August 2024 and between November 2024 and January 2025 -- using the Goods and Services Tax Network (GSTN) data as a frame to recognise enterprises.
It was conducted for the incorporated services sector because the Annual Survey on Unincorporated Enterprises (ASUSE) gives insights into informal services.
The data from the survey showed only 8.5 per cent services enterprises were 'public limited companies' and 7.9 per cent were 'limited liability partnerships' (LLPs).
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Besides, the study showed India's services sector was dominated by larger enterprises, valued at ₹500 crore or more. They contributed more than two-thirds of gross value added (GVA), despite being only 2.8 per cent of the services sector.
Meanwhile, these large firms had a 62.3 per cent share of capex and a similar share in fixed assets.
Their share in outstanding loans stood at 36.1 per cent, and in employment, it was less pronounced at 37 per cent.
On the other hand, enterprises with output ranging between ₹100 crore and ₹500 crore represent 8 per cent of the total and contribute about 25 per cent of fixed assets, over 42 per cent of outstanding loans and around 20 per cent of GVA.
In employment, their share was 33.7 per cent.
Smaller companies, which were over half the surveyed firms, accounted for just 2.6 per cent of assets, 2.4 per cent of capex and 1.2 per cent of output. The study classifies smaller firms as those with an output of less than ₹10 crore.
The NSO said in a statement that starting 2026 India would have detailed data on the contribution of formal services sector firms to the economy and employment, just like the Annual Survey of Industries (ASI) did for the industrial sector.
This data will be vital because the services sector has more than a 60 per cent share in the economy.
'The pilot study confirmed the suitability of the GSTN database as a sampling frame for the survey,' said the NSO in a statement.
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