Services soar in new company registrations in FY24
NEW DELHI : Services sector raced ahead in company registrations in the just-ended financial year, reflecting the rapid formalization of a segment with few entry barriers. While services accounted for 71% of the 185,300-plus new companies registered in FY24, industry made up less than a fourth, while the farm sector accounted for about 6%.
The latest figures for the services sector registrations are a sharp increase from 63% in FY21 and FY22 and 65% in FY23, corporate affairs ministry data showed. Within the services sector, community, personal and social services clocked the sharpest growth with 49,241 new registrations, nearly double the levels in the preceding year.
Experts said that while the central government has been encouraging large-scale manufacturing under the Atmanirbhar Bharat initiative, the services sector still contributes over half of India’s economic output. “This, coupled with the fact that services sector has the lowest barrier to entry compared to industry or agriculture, we have witnessed an uptick in new company registrations.
Another driving factor for increased organic interest in the services sector is the increasing share of digitally delivered services, which has witnessed exponential growth in global exports," said Anjali Malhotra, partner-regulatory at tax and advisory firm Nangia Andersen India. The increased integration of India in the global services supply chain and a healthy pool of experienced professionals setting up startups, supported by government schemes, have also helped lift company registrations in the services sector, said Malhotra added.
Experts also consider rising compliance in Goods and Service Tax (GST) having an effect on company registrations. “The formalization of the
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