PYQ Question

With reference to the Indian economy after the 1991 economic liberalization, consider the following statements: 1. Worker productivity (rs. per worker at 2

August 6, 2026 en

With reference to the Indian economy after the 1991 economic liberalization, consider the following statements: 1. Worker productivity (rs. 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

Answer: B

Explanation

In NITI Aayog’s paper “Changing Structure of Rural Economy of India Implications for Employment and Growth 2017”, following observations were made: The absolute level of income per worker i.e. worker productivity has increased for both rural and urban areas. For rural areas it was Rs. 37273 in 2004-05 and Rs. 101755 in 2011-12, while for urban areas it was Rs. 120419 in 2004-05 and Rs. 282515 in 2011-12. Hence statement 1 is incorrect. As per 2011 Census, 68.8% of India’s population and 72.4% of workforce resided in rural areas. However, steady transition to urbanization over the years has led to a decline in the rural share in the workforce, from 77.8% in 1993-94 to 70.9% in 2011-12. Hence statement 2 is incorrect. About two third of rural income is now generated in non-agricultural activities. Non-farm economy has increased in rural areas. The share of agriculture in rural economy has decreased from 57% in 1993-94 to 39% in 2011-12. Hence statement 3 is correct. After 2004-05, the rural areas have witnessed negative growth in employment inspite of high growth in output. The growth rate of rural employment was 1.45% during 1994-2005, which fell to -0.28% between 2005-12. Hence statement 4 is correct.