Rising Importance of the Tertiary Sector

Understanding Economic Development | Class 10 | Economics | Notes + Quiz

About Lesson

Between 1973-74 and 2013-14, production in all three sectors increased, but the tertiary sector saw the largest increase. 📊
By 2013-14, the tertiary sector became the largest producing sector in India, replacing the primary sector. 🏆
This shift indicates a significant change in the structure of the economy. 🔄
Urbanization plays a big role in the rise of the tertiary sector, with cities seeing more demand for services like healthcare, entertainment, and financial services. 🏙️
Technological advancements have also fueled growth in areas like IT, telecommunications, and digital services. 💻📱
As the country develops, more people enter the middle class, increasing demand for services in education, entertainment, and leisure. 🎓🎥

Basic Services: Countries require essential services such as hospitals, educational institutions, post services, police stations, courts, etc., which the government often provides. 🏥📚💼
In a developing country like India, the government plays a key role in offering these basic services to meet growing demand. 🏛️
The public sector often takes responsibility for providing key services like healthcare, education, and transportation, ensuring they are accessible to all citizens. 🚑🏫🚉
Social infrastructure is crucial in a developing economy, where services such as water supply, sanitation, and electricity are basic needs for the public’s well-being. 💧🔌
Government intervention in the service sector ensures equity in access to essential services, especially in rural and underserved areas. 🌾
Private sector involvement also supports the expansion of specialized services such as private hospitals, specialized education, and entertainment. 🏥🎭
As urban areas grow, the tertiary sector becomes central to the economy by providing jobs, infrastructure, and connectivity for urban populations. 🏢🌆

The growth of the primary (agriculture) and secondary (industry) sectors leads to greater demand for services like transport, trade, storage, and more. 🚚🏢
As agriculture and industry expand, the need for services like transportation and storage grows accordingly. 🌾➡️🚚
Agricultural modernization increases demand for market services and logistical support to move goods from rural to urban areas. 📦🏙️
The industrialization process boosts demand for skilled labor in services like repair and maintenance, consulting, and quality control in manufacturing. 🛠️💼
Trade services, such as wholesale markets, warehousing, and distribution networks, become increasingly important as production volumes grow. 📦🏢
Economic diversification in rural areas drives a need for new services, including microfinance, insurance, and digital payment systems to support farmers and rural businesses. 🏡💳

With increased income levels, more people demand services such as eating out, tourism, shopping, private healthcare, and education. 🍴✈️🛍️
Big cities especially witness a clear shift, as more people have the means to seek a diverse range of services. 🏙️
This change is particularly visible in urban areas, where the demand for such services is on the rise. 🌆
As incomes rise, there’s also a growing demand for luxury services such as fine dining, exclusive travel, and premium retail experiences. 🥂🌍👗
Changing lifestyles and greater disposable income have made services like fitness centers, spa treatments, and entertainment options increasingly popular. 🏋️‍♂️🍿
In metropolitan areas, a growing middle class is now opting for higher-quality services such as private schooling, health insurance, and personalized financial planning. 🏥🏫💼
The increased demand for leisure services such as vacationing and recreational activities is also driving growth in tourism and hospitality industries. 🌴🌍

The rise of information and communication technology (ICT) has brought about the growth of new services that are now essential for the economy. 🌐💡
These services have seen rapid growth over the past decade and have become important for both business and daily life. 🖥️📲
E-commerce, online education, cloud computing, and telemedicine are prime examples of the growing ICT-based services transforming India’s economy. 🛒📚🏥
ICT services facilitate global connectivity, enabling businesses to expand, create jobs, and increase productivity. 🌍💼
Tech startups and digital platforms (like ride-sharing and food delivery apps) have emerged as significant players, creating both employment and revenue opportunities. 📱🚗🍔
The growth of digital services such as financial tech (FinTech), health tech, and ed-tech has revolutionized industries and led to more accessible services for the general population. 💳🏥🎓
The government’s focus on Digital India and Make in India initiatives has further accelerated the demand for tech-driven services, boosting the sector’s contribution to GDP. 🏛️🇮🇳

The service sector offers a wide range of employment opportunities, from highly skilled, educated roles to low-skill jobs. 💼👩‍🔧
At the top end, skilled professionals work in fields like banking, technology, and healthcare, while at the bottom, workers like shopkeepers and transporters barely make ends meet. 🏢🛒🚖
Job security and opportunities vary greatly within the sector. While some services grow in importance, others face challenges in providing stable income. ⚖️💼
The formal sector provides better job security and higher wages, with employees receiving benefits like health insurance, pensions, and paid leave. 🏢💰
Conversely, the informal sector employs a large portion of the workforce, offering low wages and often lacking social benefits like job security or healthcare. 🏠👨‍🔧
Urbanization and the expansion of service-oriented industries have also led to a rise in temporary and gig work, such as freelancing in IT, marketing, and content creation. 💻📸
In contrast, many workers in the informal service sector, such as street vendors, cleaners, and delivery personnel, lack stable employment contracts and face economic uncertainty. 🛵🍲

Swastika Shiksha