With reference to the Indian economy after the 1991 economic liberalization, consider the following statements : 1. Worker productivity (₹ 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 ?
- (a) 1 and 2 only
- (b) 3 and 4 only ✓ UPSC's answer
- (c) 3 only
- (d) 1, 2 and 4 only
Why the answer is (b)
• After 1991 the rural economy diversified: construction, trade, transport and services grew faster than agriculture, so the rural non-farm economy expanded (statement 3).
• At the same time, rural employment growth slowed sharply, especially after 2004–05, as agriculture shed workers and jobs shifted to cities (statement 4).
• Statement 1 is wrong: worker productivity rose in both rural and urban areas, not fell in rural areas.
• Statement 2 is wrong: the rural share of the workforce has steadily declined with urbanisation.
• Hence 3 and 4 only, option (b).
Why the other options are wrong
- (a) 1 and 2 only
- Statements 1 and 2 are wrong: rural productivity rose and rural workforce share fell.
- (c) 3 only
- Statement 4 on slowing rural employment is also correct.
- (d) 1, 2 and 4 only
- Statements 1 and 2 are wrong.
Asked in the GS Paper I of the UPSC Civil Services Preliminary Examination 2020, held on 4 October 2020. Question and answer key: Union Public Service Commission. Explanation: UPSC Answer Check.