Future Impact of Service Sector in India: A Path way of Business & Society

Abstract

The government agencies group industries into four industrial sectors - agriculture (including forestry, fishing, poultry, etc.), mining, manufacturing and services. It can also be classified into three sectors i.e. the primary sector (agriculture, forestry, fishing and mining), the secondary sector (manufacturing) and the tertiary sector (services). Until recently, the service sector was not considered as important as other sectors. However, this view of the service sector changed considerably, particularly in the 1980s, when it was realised that services consist of a large and significant component of modern economies - both industrial and post- industrial. The service sector produces intangible goods. Some are well known and already existing viz. government, health, education and some are quite recent viz. communications, information technology, etc. Production of services tends to require relatively less natural capital and more human capital in comparison to agricultural or industrial goods. As a result, the demand has grown for more educated workers prompting countries to invest more in education bestowing an overall benefit to their people. Another benefit of the growing service sector is that by employing fewer natural resources, it puts less pressure on the local, regional and global environment.

In the early economies, the service sector was primarily underdeveloped because governments failed to respond to the growing demand for services. However with the shift to market economies, the service sectors have grown rapidly to meet the rising needs of the emerging private sectors. Growth of services is particularly important because it allows these economies to employ a share of the educated labour force. So, in addition to continued public support for health and education, growth of services can help countries preserve the stock of human capital that will be crucial to their development.