Civil Services Prep

Prelims 2020 · Economy · Question 88

With reference to the Indian economy after the 1991 economic liberalization, consider the following statements: 1. Worker productivity (Rs. per worker at 2004-05 prices) increased in urban areas while it decreased in rural areas. 2. The percentage share of rural areas in the workforce steadily increased. 3. In rural areas, the growth in non-farm economy increased. 4. The growth rate in rural employment decreased. Which of the statements given above is/are correct?

  1. 1 and 2 only
  2. 3 and 4 only
  3. 3 only
  4. 1, 2 and 4 only

Answer

3 and 4 only

1. Worker productivity increased in urban areas while it decreased in rural areas — Incorrect. Rural worker productivity did not decrease after 1991; productivity generally rose in both rural and urban areas, though urban productivity remained higher.

2. The percentage share of rural areas in the workforce steadily increased — Incorrect. With structural transformation and urbanization, the rural share in total workforce declined rather than steadily increasing.

3. In rural areas, the growth in non-farm economy increased — Correct. Post-liberalization, rural non-farm activities such as construction, trade, transport and services expanded significantly.

4. The growth rate in rural employment decreased — Correct. Rural employment growth slowed in the post-reform period, especially compared to earlier decades.

Therefore, statements 3 and 4 only are correct.

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