Q. 254.0( 8 Votes )

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Answer :

In the preceding years, there has been a shift in economic activities from the secondary to the tertiary sector in both developed countries and developing countries. The service sector has become the most dominant and important sector in terms of total production. In India, the service sector has emerged as the largest producing sector within a short span of 10 years. The contribution of the service sector is now beyond that of the primary and the secondary sectors. It is the fastest and the more rapidly growing sectors in the Indian economy.

The service sector had started to gain importance in the country with the trade liberalisation and opening up of the economy in 1991. By 2011-12 service sector became the sector contributes the largest in terms of Gross Domestic Product and generation of employment opportunities. The reasons for the rapid growth of the service sector are:

Development of basic facilities: The development and growth of basic services like hospitals, educational institutions, post and telegraph services, police stations, courts, village administrative offices, municipal corporations, defence, transport, banks, insurance companies, transport facilities and other are pre-requisite for the development of any country. In developing countries, the responsibility of providing these services rests with the government. The growth of these basic facilities contributes to the development of the service sector.

Development as allied services: With the faster development of agricultural and industrial sectors, the demand for other allied services like transport, trade, storage and communication is required. The faster the rate of development of the primary and secondary sectors, more would be the demand for the subsequent services. This leads to the faster development of tertiary services.

Development with the increasing consumption demand: As income level of the people engaged in other sectors rise, people start demanding many services and facilities like restaurants, hotels, tourism, shopping, professional training and privatisation of other basic facilities. This can be seen especially in big cities. This leads to the expansion of the tertiary sector.

Development of technology: With the development of services based on information and communication technology, the demand for allied services has resulted in the expansion of the service sector. The expansion of IT parks and such others have also increased the employment opportunities in the country. The production of these services has been rising rapidly.

The development of the tertiary sector has been very rapid in the country. According to the data of 2017-18, service sector contribution is estimated to be more than 53.66% of the national income of the country. Also, the development of the service sector has created millions of employment opportunities. On average, the tertiary sector that produces more than three-fourths of the total produce is responsible for creating the maximum employment opportunities in the country. Thus, the tertiary sector can be considered as the driving force of the country’s development.

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