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Prelims 2020 · Q58 · Poverty, employment & human development

With reference to the Indian economy after the 1991 economic liberalization, consider the following statements :

  1. 1.Worker productivity (₹ per worker at 2004 – 05 prices) increased in urban areas while it decreased in rural areas.
  2. 2.The percentage share of rural areas in the workforce steadily increased.
  3. 3.In rural areas, the growth in non-farm economy increased.
  4. 4.The growth rate in rural employment decreased.

Which of the statements given above is/are correct ?

Show answer

Answer: B. Statement 1 is wrong: worker productivity rose in both urban and rural areas after 1991. Statement 2 is wrong: the rural share of the workforce fell as people moved to urban jobs. Statement 3 is correct: the rural non-farm economy (construction, trade, services) grew faster. Statement 4 is correct: the growth rate of rural employment slowed. So 3 and 4.

Watch for: Students assume rural India fell behind in every way, but rural productivity also rose.

Why the other options are wrong
  • A. Wrong because rural productivity did not fall and the rural workforce share did not rise.
  • C. Wrong because statement 4 is also correct.
  • D. Wrong because statements 1 and 2 are false.

Source to check: NITI Aayog, Changing Structure of Rural Economy of India: Implications for Employment and Growth (2017)

Answer from the official UPSC key. Written and fact-checked by AI against the official key. Spotted a mistake? Report it.