There are various factors which are responsible for the high growth of the service sector.
- Reforms introduced in 1991, removes various restriction on the movement of international finance which led to huge inflow of foreign capital foreign direct investments and outsourcing to India. This encouraged the service sector growth.
- Availability of cheap labour and skilled labour at lower wage rate.
- The revolution in Information Technology(IT) field in India has also played a major role in the high growth of the service sector.
- Indian economy is experiencing structural transformation that implies shift of economic dependence from primary to tertiary sector.