Q.11:- What is sectoral composition of an economy? Is it necessary that the service sector should contribute maximum to GDP of an economy? Comment.
The GDP of a country is derived from the different sector’s of the economy,namely the agricultural sector, the industrial sector and the service sector. The contribution made by each of these sectors makes up the structural composition of the economy.
Yes, it is necessary that at the later stages of development, service sector should contribute the maximum to the total GDP. This phenomenon is called Structural Transformation. With the development the share of agriculture declines and the share of industry become dominant. At higher levels of development the contribution of service sector becomes more than the two other sectors. This has been observed in the case of developed economies of the world.