Candidates need to discuss the potential of tertiary sector industries for becoming the driver of economic growth in India.
Introduction:
In the past 100 years, developed economies have seen a transition from a manufacturing-based economy to one where the ‘service sector’ or ‘tertiary sector’ dominates. The tertiary industry is a technical name for the services sector of the economy, which encompasses a wide range of businesses, including financial institutions, schools, hotels, and restaurants. Tertiarization involves the service sector coming to comprise the biggest element of the economy.
The potential of tertiary sector industries for becoming the driver of economic growth in India include:
A growing tertiary sector is usually a sign of increased living standards – it enables consumers to enjoy more leisure-based service activities, such as tourism, sport and restaurants.
A key factor behind tertiarization is improved labour productivity. Better technology and improved labour productivity have enabled a higher output of manufactured goods and agriculture with less labour.
This increased productivity has led to increased incomes of workers to spend on services and spare labour to be able to work in the more labour-intensive tertiary sector.
The need for tertiary is increasing as there is more need of services like financial institutions, educational institutions etc. in Indian economy.
The tertiary sector is responsible to distribute its services and goods to different consumers.
Tertiary sector has become important in India because the demand for services such as transport, trade, storage will increase with the development of primary and secondary sectors.
Other reason is the fact that the demand for tourism, shopping, private schools, private hospitals, etc. increases with the increase in the level of income.
Due to the above discussed reforms, various restrictions on the movement of international finance were minimised. This led to huge inflow of foreign capital, foreign direct investments and outsourcing to India. This encouraged the service sector growth.
Conclusion
Growing service sector is a sign of increasing standard of living. Another factor behind development of service sector is increase in productivity of labour. Due to better technology and improved labour productivity, there is a increase in output of manufacturing goods and agriculture with less labour.
