With reference to Indian economy, consider the following statements : 1. The rate of growth of Real Gross Domestic Product has steadily increased in the last decade. 2. The Gross Domestic Product at market prices (in rupees) has steadily increased in the last decade. Which of the statements given above is/are correct?
- (a) 1 only
- (b) 2 only ✓ UPSC's answer
- (c) Both 1 and 2
- (d) Neither 1 nor 2
Why the answer is (b)
• Statement 2 is correct: nominal GDP at market prices in rupees rises every year because it reflects both real growth and inflation, so it has steadily increased.
• Statement 1 is wrong: the real GDP growth rate fluctuated — about 9% in 2005–08, a dip in 2008–09, recovery, then a slowdown to under 5% in 2012–13 — it did not steadily increase.
• Hence 2 only, option (b).
Why the other options are wrong
- (a) 1 only
- Statement 1 is wrong: growth rates fluctuated.
- (c) Both 1 and 2
- Statement 1 is wrong.
- (d) Neither 1 nor 2
- Statement 2 is correct: nominal GDP rose steadily.
Asked in the GS Paper I of the UPSC Civil Services Preliminary Examination 2015, held on 23 August 2015. Question and answer key: Union Public Service Commission. Explanation: UPSC Answer Check.