Post 1991 in India, the _ _ _ _ _ _ sector contributes the highest to its gross domestic product.

Service sector

The correct answer is option (2) : Service sector

As a country develops, it undergoes ‘structural change’. In the case of India, the structural change is peculiar. Usually, with development, the share of agriculture declines and the share of industry becomes dominant. At higher levels of development, the service sector contributes more to the GDP than the other two sectors. In India, the share of agriculture in the GDP was more than 50 per cent—as we would expect for a poor country. But by 1990 the share of the service sector was 40.59 per cent, more than that of agriculture or industry, like what we find in developed nations. This phenomenon of growing share of the service sector was accelerated in the post 1991 period.

The post–1991 India witnessed a rapid growth in GDP on a continual basis for two decades. The growth of GDP increased from 5.6 per cent during 1980–91 to 8.2 per cent during 2007–12. During the reform period, the growth of agriculture has declined. While the industrial sector reported fluctuation, the growth of the service sector has gone up. This indicates that GDP growth is mainly driven by growth in the service sector.