GENERAL KNOWLEDGE

Detailed explanation-1: -According to this theory, the shift towards services takes place mainly due to the service sector’s lower productivity, higher costs and thus higher relative prices than those in the manufacturing sector. In other words, the shift to services happens because the service sector is stagnant and less progressive.

Detailed explanation-2: -An economy grows when it has the capacity to produce more. Production is based on how much capital, labor, natural resources, and technology it has to produce. Policies that encourage the accumulation of any of these leads to economic growth.

Detailed explanation-3: -India leap-frogged from an agrarian economy to a service economy. India has immense human resources, that are well-educated and fluent in English, and labour is also cheap, thus propelling the service sector.

Detailed explanation-4: -Governments are primarily service-providers in a service economy, where standards of performance are rising, and where penalties for failure are rising with them.