Rising Importance of the Tertiary Sector in Production:
By the end of 20th century and the beginning of 21st century, the tertiary sector became the most dominant sector of Indian economy. There are several reasons for that:
The expansion of basic services like healthcare, education, telegraph and postal service, police, defense and transport etc.
Greater the development of the primary and secondary sectors, more would be the demand for such services.
As income levels rise, demand for more expensive services increases, including luxurious services, like eating out, tourism, shopping, private hospitals, private schools, professional training etc.
Over the past decade or so, certain new services such as those based on information and communication technology have become important and essential.
However, service sector employs diverse sections of society. From limited number of highly skilled workers to large number of low paid workers, every part of the sector is not growing equally well.
Where are most of the people employed?
The growth of secondary and tertiary sector in India has however reflected the growing problem of unemployment and underemployment.
In last thirty years, the secondary sector has grown more than 8 times, but workers employed in this sector has grown only by 2.5 times. In tertiary sector, the production has increased by almost 11 times, but employment less than 3 times.
The primary sector still covers two-third of workforce of India. But it contributes only a quarter of GDP. There are persons involved in the sector more than necessary.
When there are more persons in a sector (mainly agriculture) than necessary, then removal of those person will not affect the production or output of the sector. This situation is called Underemployment.
The underemployed persons do not exercise their full potential. It is also called disguised unemployment because the underemployed persons are not visible clearly as they pretend to be working.
How to Create More Employment?
The modernization of agriculture sector can help reduce underemployment. Government can facilitate construction of wells or tube wells for irrigation, leading to cultivation in Rabi season also.
Construction of dams, digging of canals etc. under government scheme can give temporary employment to the rural unemployed adults.
For transportation of farm produce, government invests in transportation facility and storage like making or improving rural roads, providing vehicles to carry goods etc. The rural unemployed youth can utilize these services.
Promoting and locating industries and services in semi-rural areas can help in employing a large number of people.
Opening a cold storage could give an opportunity for farmers to store their products like potatoes and onions and sell them when the price is good.
In 2005, Central Government passed Mahatma Gandhi National Rural Employment Guarantee Act(MGNREGA,2005). Under this Act, all those who are able to, and are in need of, work have been guaranteed 100 days of employment in a year by the government.