The correct option is Deepening of infrastructure and service networks.
Explanation
The economy is structurally divided into three sectors: Primary (agriculture and allied activities), Secondary (manufacturing and industry), and Tertiary (services). The Gross State Domestic Product (GSDP) represents the total monetary value of all goods and services produced within a state. A structural shift towards the tertiary sector implies that the service sector is contributing a larger proportion to the economic value added compared to other sectors.
Option Analysis:
- Deepening of infrastructure and service networks is Correct: The tertiary sector comprises services such as transportation, communication, banking, trade, and storage. These components form the core of an economy's infrastructure. Therefore, a rising share of the tertiary sector in GSDP generally indicates the expansion and deepening of infrastructure and service networks necessary to support economic activities.
- A shift from labour-intensive sectors to capital-intensive sectors is Incorrect: A shift to the tertiary sector does not necessarily imply a shift to capital-intensive sectors. The service sector includes a wide range of activities, many of which are labour-intensive (e.g., retail trade, hospitality, construction, and personal services), while others may be capital or knowledge-intensive (e.g., telecommunications, IT).
- Degrowth of manufacturing and agriculture is Incorrect: An increase in the share (percentage contribution) of the tertiary sector does not imply the degrowth (absolute decline) of manufacturing or agriculture. It simply means that the tertiary sector is growing at a faster rate than the primary and secondary sectors.
- Decline in employment elasticity is Incorrect: An increase in the tertiary sector's share does not automatically indicate a decline in employment elasticity (the rate at which employment grows as the economy grows). While some high-value services (like software) may have lower employment elasticity, other services (like transport and tourism) are significant employment generators.
Key Takeaway:
An increasing share of the tertiary sector in GSDP reflects the maturation of the economy, characterized by the development of infrastructure (transport, communication) and financial services, rather than the absolute decline of agriculture or industry.