Which of the following has/have occurred in India after its liberalization of economic policies in 1991? 1. Share of agriculture in GDP increased enormousl

1. A. 1 and 4 only
2. B. 2, 3 and 4 only
3. C. 2 and 3 only
4. D. 1, 2, 3 and 4

Answer: B

Explanation

The post-reform period shows the gradual decline in the agriculture sector’s contribution to the Indian economy. India’s traditional occupation, agriculture now contributes only about 15% to the GDP, down from 29 percent in 1991. Hence, statement 1 is incorrect. Share of India’s exports increased since 1991. Hence, statement 2 is correct. Before 1991, foreign investment was negligible. The first year of reform saw a total foreign investment of only $74 million. However, investments have steadily risen since then, except for occasional blips between 1997 and 2000 and 2008 and 2012 – owing to the global economic slowdown. As of 31 March 2016, the country has received total FDI of $371 billion, since 1991. The year 2008 recorded the highest FDI inflow of $43.40 billion. The biggest spurt in inflow was between 2005 and 2006 – 175.54%. As of March 2016, India has attracted $10.55 billion worth of FDI. Hence, statement 3 is correct. It was India’s dismal state of forex reserves that forced the government to bring in economic reforms. Now, 25 years later, forex reserves are at a record high. In 1991, it stood at just $5.8 billion. As of 24 June, the country’s forex reserves are at $360.8 billion. Usually, import coverage of 7-8 months is considered sufficient. The biggest jump in reserves was witnessed between 2007 and 2008 when the kitty bulged 55% to hit $309.2 billion. Hence, sttement 4 is correct.