Page 33 - Understanding Economics for Class 10

rising importance of the tertiary sector in production
 Over the four decades, from 1973-74 to 2013-14, all the three sectors have shown increase in
production but it is the tertiary sector which has grown the most. In 2013-14, it has replaced
primary sector in terms of production and emerged as the largest producing sector in India.
Goyal Brothers Prakashan
Various Reasons of rising importance of tertiary sector:
 Basic services like hospitals, education, banks, defence, insurance etc. are required in
every country. These services help in the development and growth of the country. In
developing countries, it is the responsibility of the government to provide these services.
 Due to the development in primary and secondary sector, there is more demand for
tertiary sector which creates more demand for services such as transport, trade, storage
etc. storage.
 Because of the rising income level, certain section of people started demanding services
like entertainment, shopping which gives rise to more shopping malls, tourism, private
hospitals and schools etc.
 Over the past years, importance of information technology and communication has
increased a lot. Production of these services has been rising rapidly.
 Service sector in India employs many different kinds of people. At one end there are a
limited number of services that employ highly skilled and educated workers (their earnings
are also growing). At the other end, there are a very large number of workers engaged in
services such as small shopkeepers, repair persons, transport persons, etc. (their earnings
are just enough to earn their living but they don’t have other alternatives).
 This shows, not all of the service sector is growing equally well. Only a part of this
sector is growing in importance.

Where are most of the people employed?
Share of Sectors in GDP (%)
100%
90%
80%
70%
60% Tertiary
50% Secondary
40% Primary
30%
20%
10%
0%
1973-74 2013-14
(Courtesy: NCERT)
 Above graph represents the percentage share of the three sectors in GDP.
 It shows, there has been a change in the share of the three sectors in GDP. Shift from primary
to tertiary sector is seen in 2013-14, Tertiary sector contributes the most to the GDP.
 The above graph shows share of sectors in employment in 1977-78 and 2017-18. Although
the employment in tertiary sector has grown over the years but primary sector continues
to be the largest employer even now. It provides 44% of the employment whereas
tertiary sector’s share is 31%.
So, it is a remarkable fact about India that while there has been a change in the
share of the three sectors in GDP, a similar shift has not taken place in employment.

Economics Class X E-27