Directions (Next Ten Questions) : Read the following passage carefully and answer the given questions. Certain words have been given in bold to help you locate them while answering some of the questions.

PASSAGE

On attending a conference, which focused on the role of the service sector in Indian economy, I was amazed. The conference gave a very interesting perspective on the role of service sector in the growth of the Indian economy in relation to growth rates in agriculture and industry. The current situation in India is that the growth rate of services has overtaken both agriculture and industry and is now contributing to more than fifty percent of GDP. The services sector has the highest growth rate and is the least volatile sector. Growth is particularly marked in public services, IT and financial services. In some areas the growth rate of the service sector is forty to fifty percent due to increased use of mobile technologies. India, therefore, has a services-oriented economy. It hasn’t followed traditional growth models as in china. However, in the process of doing so it has skipped the manufacturing stage and has jumped straight from the agricultural stage to service stage which is also the main reason for the expansion of the service sector. In fact, the situation now is such that the growth in the service sector can and will support the growth in the agricultural and industrial sectors. However, the only setback for Indian economy is the lack of growth in the manufacturing sector, which causes dependence on other countries, which is not so desirable in terms of job creation and increased prosperity.

Population is also a major concern of the Indian economy. As the population of India grows so also does the number of dependents in the population of India grows so also does the number of dependents in the population in both the lower and higher age groups. In such a scenario of increasing population, especially in an economy, which is still recovering from crisis, growth becomes difficult. For such an economy to grow it has to invest. Currently, the public sector invests more than it saves. The household sector saves in surplus but it is not increasing. So it cannot continue to support private and public sectors. There is a massive need to spend on agriculture and infrastructure development of the country. Apart from health, education, should also be the priority of the government, particularly the education of women, in order to reduce the birth rate.

However, all said and done, we cannot deny the fact that growing population of the country can also benefit the economy if considered as a resource and used efficiently. In fact, it is said that in the next two decades a ‘growth window’ for India will open, which may not come again because the working population to total population ratio increases up to mid 2030s only. It is important for India to maximize its economic growth in this period and for doing so, it will be important for India to absorb the growing labour force. This would mean that most people in the country would be employed (with a steady income), the number of dependents in the population would reduce and with effect the economy would prosper. Absorbing the labour force is also very important if the service sector is to play a key role in the growth of Indian economy.

Today, to address the issue of poverty in India, there is a need to change the bad sectors into good sectors and in turn to move people from unemployment to employment. Only the service sector can help in doing so and thus can have major impact on poverty. Although the service intensive sectors such as hotels, restaurants and IT are booming with the growth in human skills, there are geographical, labour union and human skills restrictions on labour movement. The key question here, I suppose, is that- can services sector lead the economy? For example, can services such as IT, be taken to rural areas ? Experts in the conference have suggested that it seems that services could lead the economy; however there are certain prerequisites for the same. In other words, there needs to be greater equality between the different states and a better gender balance. There is also the need for additional fiscal equality, tax reforms to fund education, reduction in government debt and the revenue account must be kept in balance. Progress is a good but still the initial conditions for growth have not yet been achieved.