Question

Explain the fact that why contribution in GDP is being on increasing but employment in that proportion is not increase?? Give reason.​

Answer 1

Answer:

There are three sector in any economy-

a) Primary-Agriculture allied activities

b) Secondary- manufacturing , mining, electricity ans gas production

c) Tertiary- Services

As any economy grows the share of primary sector in the GDP goes down and first share of secondary sector goes up followed by tertiary sector. At advanced stage of development primary sector contributes lest the GDP. Secondary sector contribute more then primary sector but less then tertiary sector. This is general phenomena. as secondary and tertiary sector grows they employ more and more people but these sectors require more skilled people as compare to primary sector. Though people move out of primary sector and obtain employment in secondary and tertiary sector but still a large part of population still depend on primary sector for employment. this phenomenon is generally seen in the case of developing countries in India. Primary sector produce goods with little value addition while tertiary sector produce services like trading, financial services , logistics, communication etc. with much higher value addition. Tertiary sector requires more skilled people which are not abundantly available. Secondary sector lies some where between primary and tertiary sector. that is the main reason why tertiary sector employ less people with much higher output.