Key Sector III — Services (Tertiary Sector)

The tertiary or services sector covers trade, transport, communication, banking and finance, real estate, public administration, education, health, tourism and information technology. As in the Indian economy as a whole, services have become the largest single contributor to Andhra Pradesh's income.

Sectoral composition of state income (GSDP). According to the state's official Socio-Economic Survey for 2024-25, the sector-wise shares of the state's income (Gross State Domestic Product) were approximately:

(These are official estimates for 2024-25 and are revised every year; the exact figures differ slightly between the current-price and constant-price series and between successive surveys, so a student should always quote the shares with the year and treat them as approximate.)

What the composition tells us. Two features stand out. First, services are now the largest sector — the normal signature of a modernising economy. Second, and unusually, agriculture's share (~a third) is still much higher than in most fast-growing states or in the all-India figure — a direct reflection of Andhra Pradesh's agrarian character. This is why the state is often described as having a dual economy: a large modern-services and industrial component sitting alongside a still-dominant farm sector.

Components of the services sector. Trade and transport benefit from the state's ports and coastal position; banking and finance support both farm and non-farm activity; tourism draws on the state's temples (Tirupati is one of the most-visited pilgrimage centres in the country), beaches and hill stations; and information technology and IT-enabled services are being actively promoted, particularly around Visakhapatnam, to help rebuild the high-skill service base lost with Hyderabad. …