Importance of the tertiary (service) sector in the economy :
1. Support to primary and secondary sectors - Tertiary activities do not produce a good but they are an aid or support for the production process. Goods produced in the primary and secondary sectors need to be transported by trucks or trains, stored in godowns and then sold in shops.
2. Basic services - In any country several services such as hospitals, educational institutions, post and telegraph services, police stations, courts, village administrative offices, municipal corporations, defence, transport, banks and insurance companies are required. These may be considered as basic services which the government has to provide.
3. Rising demand with development - As income levels rise, people begin to demand more services such as tourism, shopping, private hospitals, private schools and professional training.
4. New services based on information technology - Over the past decade services based on information and communication technology - internet cafes, ATM booths, call centres, software companies - have become important. Their production has been rising rapidly.
5. Largest contributor to GDP and growing employment - Over the forty years between 1973-74 and 2013-14 the tertiary sector has emerged as the largest producing sector in India, replacing the primary sector, and it is also becoming an important source of employment.
Conclusion : However, not all service-sector jobs are of equal quality; a large number of workers such as small shopkeepers, repair persons and washermen are engaged in low-paid service work.