Roadmap for Answer Writing
Introduction
- Context Setting
- Introduce the typical economic progression of countries: agriculture → industry → services.
- Mention India’s unique shift directly from agriculture to services, referred to as “premature deindustrialization.”
- Thesis Statement
- State the focus of the response: to explore reasons for the growth of the service sector and discuss the implications of lacking a strong industrial base for India’s development.
Body
Reasons for Huge Growth of Services vs. Industry
- Economic Liberalization
- Fact: Liberalization in 1991 led to increased foreign investment, particularly in IT and BPO sectors.
- Explain how this liberalization created opportunities for the services sector to flourish.
- Availability of a Skilled Labour Force
- Highlight India’s large, educated workforce that is well-suited for service roles and comparatively low-wage.
- Discuss the impact of this labour pool on the growth of IT and BPO services.
- Low Capital Requirement for Services
- Explain how the service sector has lower capital investment needs, making it more accessible for entrepreneurs.
- Discuss how this accessibility has led to a proliferation of service-based businesses.
- Supportive Government Policies
- Mention government initiatives that promote the service sector, including tax incentives and infrastructure investment.
- Discuss how these policies have bolstered service industry growth.
- Challenges in the Industrial Sector
- Fact: High costs of doing business, inadequate infrastructure, and low labour productivity hinder industrial growth.
- Discuss how these issues have contributed to a decline in the industrial sector.
Can India Become a Developed Country Without a Strong Industrial Base?
- Arguments for Industrial Base Importance
- Discuss the role of a strong industrial base in creating jobs for the youth transitioning from agriculture.
- Explain how industry can diversify the economy and increase resilience against external shocks.
- Potential Risks of Over-Reliance on Services
- Discuss the risks of relying solely on the service sector, such as economic inequality and vulnerability to global market fluctuations.
- Balanced Development
- Argue that a balanced approach, integrating both services and industry, is essential for sustainable growth.
Conclusion
- Summary of Key Points
- Reiterate the reasons for the growth of services and the importance of a robust industrial base for balanced development.
- Final Thoughts
- Emphasize that while India has made significant strides in the service sector, a strong industrial foundation is crucial for achieving developed nation status.
India’s Shift from Agriculture to Services and Its Implications:
1. Reasons for Huge Growth in Services Sector:
2. Can India Become a Developed Country Without a Strong Industrial Base?
Recent Example:
Conclusion: India’s direct shift from agriculture to services has been driven by IT and BPO growth, economic reforms, and urbanization. For India to become a developed country, it must strengthen its industrial base while continuing to leverage its services sector. A balanced economic strategy involving both sectors is essential for sustainable and inclusive development.
Model Answer
Introduction
Typically, countries transition from agriculture to industry before moving to services. However, India has experienced a direct shift from agriculture to services, a phenomenon referred to as “premature deindustrialization.” This shift raises questions about the reasons behind the robust growth of the services sector and whether India can achieve developed status without a strong industrial base.
Reasons for Growth of Services vs. Industry
Can India Become a Developed Country Without a Strong Industrial Base?
While India can achieve some level of development through its booming service sector, a robust industrial base is crucial for balanced and inclusive growth. A strong industrial sector can:
Conclusion
In conclusion, while India has experienced significant growth in the services sector, relying solely on this path could lead to unequal development. Establishing a strong industrial base is essential for fostering a balanced and inclusive economy, enabling India to emerge as a developed nation.