Skip to content
Exercises · Q12
Q.

Study the following illustrative table on the broad direction of sectoral shares in India's GVA and employment over recent decades, and answer: (a) which sector shows a rising trend in both output and employment share, and (b) why does the tertiary sector's employment share rise more slowly than its output share?

Broad sectorLong-run trend in GVA shareLong-run trend in employment share
PrimaryDecliningDeclining, but still comparatively large
SecondaryRoughly stable to modestly risingRising slowly
TertiaryRising steadily; now the largest shareRising, but below its GVA share
Telangana TsbieTextbookSubjectiveImportance★★★★★est
60% · 12/20 Questions
🔒 Locked · start free trial →

You're viewing a preview — the full solution, concept, methods & PYQ mapping are locked.

Start your 14-day free trial to unlock the full solution →

The table is a simplified, illustrative summary of a well-documented long-run pattern in India's structural change, and can be read as follows.

  1. Looking across the three rows, only the tertiary sector shows a rising trend in both its share of GVA and its share of employment. The primary sector's share is declining on both counts (though its employment share remains comparatively large relative to its shrinking output share), and the secondary sector's employment share is rising only slowly, without the same clear rise in its GVA share. The tertiary sector is therefore the one sector expanding its footprint in the economy on both measures at once.
  2. Even so, the table itself shows that the tertiary sector's employment share rises more slowly than its GVA share, so that a gap between the two persists. The reason lies in the composition of the sector discussed earlier in this chapter: its fastest-growing, highest-value branches — software and IT-enabled services, banking and finance, professional and business services — are relatively skill- and capital-intensive, meaning they generate a great deal of output and export earnings without requiring proportionately large numbers of workers. By contrast, the branches of the tertiary sector that do employ very large numbers of workers — small-scale retail trade, personal services, much of urban transport — tend to be considerably lower in productivity, and therefore contribute less to GVA, per worker employed, than the high-value branches d …

Unlock everything free for 14 days

  • Full step-by-step solutions
  • Concept-first explanations
  • Methods, shortcuts & mistakes
  • PYQ mapping + timed mock tests

Full access for 14 days. No credit card required.