Question

Rising in the tertiary sector

Answer 1

 

The development economics suggests that during the stages of development share of service sector in the GDP increases with the development while that of primary sector decreases. With services leading the world economic growth, they are being regarded as the engine of growth as well as the necessary concomitant for economic growth.  

 

The services sector constitutes a large part of the Indian economy both in terms of employment potential and its contribution to national income. The Sector covers a wide range of activities from the most sophisticated in the field of Information and Communication Technology to simple services pursued by the informal sector workers, for example, vegetable sellers, hawkers, rickshaw pullers, etc. More than half of more than Rs.45 lakh crore GDP is attributed to the service sector. The service sector also known as tertiary sector is growing at 10 percent per annum, employing more than quarter of the work force. It accounts for a high share in foreign direct investment (FDI) inflows and over one-third of total exports.

 

The services included in the service sectors trade, tourism, communication, transport, Information Technology (IT) and Information Technology enabled services (ITeS), community and personal services, financial services, entertainment industry etc. The very nature of these services facilitates in the growth of other sectors viz industry and agriculture. Among the services, trade is an important segment in India’s GDP. The GDP from trade (inclusive of wholesale and retail in the organized and unorganized sectors) increased at 9.1 percent during 2009-10. With the growth in income and growing consuming population, the retail business also got a boost. However, share of trade in overall GDP remained fairly stable at around 15 per cent in the last four years because of higher growth witnessed by other sectors.