Q.Discuss the importance of the tertiary sector in the Indian economy.

The tertiary sector's importance goes well beyond its size in national income.

Transport, banking, insurance and communication enable the primary and secondary sectors to produce and trade efficiently; education and health directly raise living standards; and export-oriented services, particularly IT, are a major source of foreign exchange. …

The importance of the tertiary sector to the Indian economy can be explained under several heads.

First, services perform an essential supporting role for the primary and secondary sectors: 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 are increasingly spread across many locations. Without these supporting services, the primary and secondary sectors themselves would function far less efficiently.

Second, several services — most obviously education and health — directly raise the standard of living and build the human capital on which future economic growth depends, independent of their contribution to measured GDP.

Third, export-oriented services, above all IT and IT-enabled services, are a significant and dependable source of foreign exchange earnings, helping to finance India's imports and support the balance of payments. …

A common shortfall is discussing only the sector's contribution to GDP and omitting its supporting role for the primary and secondary sectors, whic …