Question

As per the theory of transformation, as a country moves towards development, the share of contribution to the national income of the three sectors of the economy (primary, secondary and tertiary) is in the sequence of :

• A. Primary $>$ Secondary $>$ Tertiary
• B. Primary $<$ Secondary $>$ Tertiary
• C. Primary $>$ Secondary $<$ Tertiary
• D. Primary $<$ Secondary $<$ Tertiary

Hint:

Structural change is characterized by:
Primary share decreases $\rightarrow$ Secondary share increases initially then stabilizes $\rightarrow$ Tertiary share continuously increases to become dominant.

Answer 1

The Correct Option is D

Step 1: Understanding the Concept:
The Clark-Fisher hypothesis and the structural transformation theory describe how the economic structure changes during development.
An economy is divided into three sectors:
1. Primary Sector (Agriculture, forestry, fishing, mining).
2. Secondary Sector (Manufacturing, construction, industry).
3. Tertiary Sector (Services, banking, trade, IT).

Step 2: Detailed Explanation:
In the early, underdeveloped stages of an economy, the primary sector dominates.
It contributes the largest share to both Gross Domestic Product (GDP) and employment.
As economic development begins and industrialization progresses, resources and labor shift from agriculture to manufacturing.
This increases the relative share of the secondary sector.
As the economy reaches advanced levels of development, the tertiary or service sector grows rapidly.
This sector eventually becomes the largest contributor to national income.
In a highly developed modern economy, the contribution to national income follows the order:
Primary Sector $<$ Secondary Sector $<$ Tertiary Sector.
For instance, in developed nations, agriculture contributes less than $5\%$, industry around $20$-$30\%$, and services contribute over $60$-$70\%$ to the GDP.
Hence, the sequence of their share is Primary $<$ Secondary $<$ Tertiary.

Step 3: Final Answer:
The correct option is (D).