Solution

Factors that helped in the growth of the service sector are as follows:

1. India being a major outsourcing market for services had high demand for banking, customer support, finance, software service, advertisement and communication which led to the growth of service sector.

2. India had undergone financial reforms in the year 1991 which expanded its economy by inflow of foreign investment which led to the growth of service industry.

3. Indian economy had undergone a structural change which shifted its focus from primary to the tertiary sector which opened up avenues for growth of services across segments.

4. By following a policy of low tariff and non-tariff barriers for products. India was able to gather a large part of the service sector from developed countries.

5. India provides a market for cheap and knowledgeable labour and this factor has helped in many developed nations in setting up subsidiaries in India to carry on their operations.

6. The growth of the IT sector and innovations in technology field has made India a favourite destination for investors and industries alike.