UPSC Prelims 2020 · Question 88 of 100
UPSC Prelims 2020 question on Rural Economy Structural Change
- ExamUPSC CSE
- Year2020
- PaperGeneral Studies Paper I
- SubjectIndian Economy
- TopicEconomic Growth
- DifficultyHard
- TypeStatement
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?
Show answer
Answer: B. 3 and 4 only
Verdict
Correct statements: 3 and 4 → Option (b).
Analysis
In NITI Aayog's paper 'Changing Structure of Rural Economy of India Implications for Employment and Growth 2017', the following observations were made:
Statement by statement
Statement 1 – INCORRECT: 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.
Statement 2 – 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.
Statement 3 – CORRECT: 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.
Statement 4 – 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.