Tertiary Sector And Its Potential
The Indian economy is divided into three sectors i.e. Primary, Secondary and Tertiary. A good performance in all these sectors is essential for India’s economic growth. The primary sector basically acts as the raw material supplier while the secondary sector or also known as the processing or the manufacturing sector turns the material into finished goods. And the tertiary sector provides services to both the primary and secondary sectors of the Economy. The tertiary sector is quite important for the Indian economy as the majority of people in India are employed in this sector.
As per the financial report till 2021 there are more than 128 million people in India are employed in the tertiary sector (service sector).
What is a Tertiary Sector?
The tertiary sector of the economy or also referred to as the service sector is a sector that includes tons of small business which acts as a service to the primary and the secondary sectors of the economy. The tertiary sector includes but is not limited to schools, financial institutions, insurance companies, banking institutions, restaurants, hotels, and many more. Many economists believe that the economy of a nation escalates when the government shits its focus on the development of the tertiary sector. The tertiary sector can also be further divided into different sectors like profit and non-profit.
As per the world bank report India holds 7th position globally in highest output from the tertiary industries with an output of more than 1.3 billion USD.
What Kind of Industries Comes under the Tertiary Sector?
The tertiary sector can provide direct service, a framework for setting up a business, as well as can carry out business operations. A majority of the tertiary sector comprises institutions involved in shipping services that can be via roadways, railways, seaways, or airways. And almost every person involved in the shipping industry from a taxi/truck driver to the supply chain manager operating from head office comes under the tertiary sector.
Other major industries that come under the tertiary sector are the hospitality industries like hotels, restaurants, and resorts. As the hospitality industry provides food and comfort services which are the basic necessity for the primary and secondary sectors. While on the other hand, many economists believe that financial institutions such as banks and other insurance companies are arguably the most important tertiary sector industries as they finance and safeguard many industries with loans and insurance.
Potential of the Tertiary Sector:
In the last few decades, it has been observed that many economies shifted their focus from the manufacturing sector to the tertiary sector, thus escalating their economic growth.
- Advanced technology and innovation played a major role in the upliftment of the tertiary sector in the Indian economy and which also resulted in increased labor productivity.
- The tertiary sector is responsible for the movement of all kinds of goods and services.
- Growth in the tertiary sector uplifts the living standards of the people and allows them to spend on their comfort and leisure.
- The increase in labor productivity results in higher wages thus increasing their purchasing capacity and benefiting other tertiary sector industries.
- Development needs money and thus the need for the tertiary sector is increasing as it includes all the financial institutions such as banks, which provides loans to individuals and organization.
The Present Condition of the Tertiary Sector in India:
The tertiary sector in India is a boon and thus providing employment to millions of people and also escalating the economic growth of the country. The shifting of interest towards the tertiary sector has benefited the Indian economy quite a lot. The contribution of the tertiary sector to the GDP of India was 28.09% in 1960 which rose to 51% in the year 2021. Similarly, employment has also shifted from the primary manufacturing sector to the tertiary sector during these years, and at present, a majority of the Indian population is employed in the tertiary sector.
A shift in the government policies can also be observed which primarily focused on the manufacturing industry but currently shifting towards the tertiary sector. In the last 3-4 decades the GOI has launched many policies and schemes for the growth of the tertiary sector in India, thus leading to make India one of the largest tertiary sector economies in the world.