Practicing Success
At higher levels of development, which of the following sector tends to contribute the most to the Gross Domestic Product (GDP)? |
Primary Sector Secondary Sector Service Sector Both Secondary and Service Sector equally contributes |
Service Sector |
As a country undergoes development, it experiences a process called "structural change," which involves shifts in the relative importance of different sectors within the economy. In most cases, as a country develops, the share of agriculture in the economy decreases, and the industrial sector becomes dominant. At higher levels of development, the service sector tends to contribute the most to the Gross Domestic Product (GDP). However, India's pattern of structural change is unique. Initially, as a poorer country, the share of agriculture in India's GDP was more than 50 percent, which is in line with expectations. But by 1990, the share of the service sector had surpassed that of agriculture or industry, resembling the trend seen in developed nations. This growing share of the service sector in India's economy was further accelerated in the post-1991 period. |