Importance and Challenges of the Tertiary Sector

Importance. The tertiary sector matters for reasons that go beyond its size in national income. It is the connective tissue that allows the primary and secondary sectors to function efficiently: transport carries a farmer's produce or a factory's output to market; banking finances working capital and long-term investment; insurance absorbs risks that an individual producer could not bear alone; and communication coordinates production and trade that is increasingly spread across many locations. Beyond this supporting role, services such as education and health directly raise living standards and build the human capital that underlies future growth. Export-oriented services, above all IT and ITeS, are also a major and dependable source of foreign exchange earnings. Taken together, the tertiary sector has, in recent decades, become the principal engine of India's GDP growth and a route through which the workforce diversifies away from low-productivity agriculture. …