Services are becoming important due to the following reasons: 

1. Economic Planning: Government of India launched five year plans in 1951 to achieve rapid growth of the country. Industrialisation requires industrial infrastructure (transport, communication, power, insurance, banking finance, etc.). Therefore, these services have expanded rapidly in the country. 

2. Increasing Urbanisation: Urbanisation has been another cause of expansion of service sector in India. There has been shifting of population from rural to urban areas. Urbanisation leads to rise in demand for infrastructure, services such as communication, public utilities and distribution services. 

3. Media: Television, internal and other media have led to spurt in tourism. Modem technology has made business more comfortable. Tourism in turn has promoted all types of services such as hotels, restaurants, travel agents, amusement parks, event management, etc. Expanding world trade has also had a demonstration effect.