The correct option is 2 and 3 only.
Explanation
The structural composition of an economy evolves as it develops. In India, the tertiary (service) sector has emerged as the largest producing sector, replacing the primary sector. This shift is driven by specific economic and social factors related to development and income growth.
Statement-wise Analysis:
- Statement 1 is Incorrect: In any country, basic services such as hospitals, educational institutions, post and telegraph services, police stations, courts, defence, transport, and banks are essential. In a developing country like India, the government takes the responsibility for the provision of these basic services. The expansion of the tertiary sector is partly attributed to the government's active role in providing these services, rather than its withdrawal.
- Statement 2 is Correct: The development of agriculture and industry naturally leads to the development of support services such as transport, trade, and storage. The greater the growth in the primary and secondary sectors, the higher the demand for these tertiary services.
- Statement 3 is Correct: As income levels rise, the demand for services becomes more income-elastic. Sections of the population begin to demand discretionary services such as eating out, tourism, shopping, private hospitals, private schools, and professional training.
Key Takeaway:
The growth of the tertiary sector in India is driven by the government's provision of basic services, the complementary relationship between industrial/agricultural growth and service demand, and the rise in disposable income leading to increased consumption of lifestyle services.