(i) In any country several services such as hospitals, educational institutions, banks, transportation etc. are considered to be the basic services for any developing country For. Example-India.
(ii) As income rises, certain sections of people start demanding more services like tourism, shopping, hospitals, schools etc. This helps in increasing the GDP of the country.
(iii) Over the past decade or so, certain new services such as those based on Information and communication technology have become essential in India. Thus, the tertiary sector becomes very important.
OR
Gross Domestic Product (GDP) is the market value of the final goods and services produced during a year within the domestic territory of a country. While calculating GDP, final goods and services are counted to avoid the problem of double counting.For e.g. a farmer sold wheat to a flour mill for ₹10 per kg. The mill grinds the wheat and sells the flour to a biscuit company for ₹12 per kg. The biscuit company uses the flour, sugar and butter to make 5 biscuit packets. It sells the biscuit to the consumer at ₹15 per biscuit packet. Here biscuits are the final goods that are purchased by the consumer. Wheat and wheat flour are the intermediate goods used in the production of final good. The value of ₹15 already includes the value of flour ₹12. Hence, only the value of final goods and services are included in GDP.