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UPSC Prelims 2020 Paper-1 📅 04 Oct, 2020

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
C
3 only
D
1, 2 and 4 only
Result Summary
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UPSC Prelims
2020 • 04 Oct, 2020 • Paper-1
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?
Correct Answer
3 and 4 only
Productivity Trends Analysis: Following the 1991 liberalization, structural improvements, mechanization, and better capital formation ensured that overall worke......
Ref/Book : UPSC Prelims 2020
Ref. Subject Economy
Chapter -
Ref. Topic Economic Reforms
Pg. No -
💡 Analysis & Explanation
Productivity Trends Analysis ▼
Following the 1991 liberalization, structural improvements, mechanization, and better capital formation ensured that overall worker productivity witnessed a definitive increase across both urban and rural areas. Thus, the claim that it decreased in rural areas (Statement 1) is factually false.
Workforce Demographics Analysis ▼
Driven by aggressive urbanization, loss of agricultural profitability, and migration for better opportunities, the percentage share of rural areas in the total national workforce has steadily declined, not increased. Statement 2 is false.
Rural Economic Shifts ▼
Liberalization spurred significant diversification in villages, leading to a noticeable and sustained expansion of the non-farm sector (such as construction, micro-enterprises, and localized services). Statement 3 is correct.
Employment Growth Slowdown ▼
While the economy grew, it was largely 'jobless growth' in traditional sectors. The overall growth rate of rural employment experienced a documented deceleration compared to the pre-1991 era. Statement 4 is correct.
Conclusion ▼
Statements 3 and 4 are the only correct statistical observations of the post-reform era.
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