Economics: Sectoral Aspects of Indian Economy: Tertiary, Service Sector, Role and Importance (For CBSE, ICSE, IAS, NET, NRA 2022)

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Tertiary/Service Sector

Many people are engaged on tertiary sector activities which are different in nature. It is also known as service sector. The service sector consists of the production of services instead of end products. Services include the following:

  • Trade, hotels and restaurants.
  • Transport, storage and communication.
  • Financial services like banking, insurance, etc.
  • Real estate and business services.
  • Public administration.
  • Other services

Role and Importance

Service sector of India has grown much in recent few years. It has become difficult to think life in the economy without services. The role and importance of service sector can be understood with the following points.

Role and Importance

Contribution to National Income

Other than primary and secondary sector, it is the service sector that has contributed maximum to the national income of India. Service sector contributes to more than half of the national income of the country.

Contribution to Employment

Now a days more and more people are getting employment in service sector. The number of educated people in India is increasing and service sector needs these people. As people become more educated, they move to service sector. So, employment in service sector is increasing.

Attracting Funds from Foreign Countries

Looking at the growth of service sector of India people from foreign countries are showing more interest to invest money in this sector to earn profit. Computer service has grown much in India which has attracted the investment from foreign countries.

Contribution to Exports

Exports refer to selling and services of Indian origin in foreign countries to earn foreign exchange in the form of dollar, euro, yen, pound, etc. Service sector has contributed a lot in earning foreign exchange for the country through exports.

Linkages Among the Three Sectors of the Economy

All the three sectors are interring linked, they complement and supplement each other. If farmer will not cultivate different crops in the field, we will not get food grains to eat and industries will not get any raw material for production by doing further process on raw material. If there is no production alone by industry sector there will be need of other services like transportation for distribution of goods and services, banking for food and if production is carried out by the industry there will be a need of different services such as banking for fund procurement, transport for distribution of goods and services and etc. so from the above situation or example we come to know that all the three sectors are interlinked and absence of any of the sector may create a difficulty in supply of all the things to the peoples in the economy.

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