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 ?
[amp_mcq option1=”1 and 2 only” option2=”3 and 4 only” option3=”3 only” option4=”1, 2 and 4 only” correct=”option2″]
This question was previously asked in
UPSC IAS – 2020
Statement 2: Post-liberalization India has experienced increasing urbanization and migration from rural to urban areas in search of better employment opportunities. This trend typically leads to a decrease, or at least not a steady increase, in the percentage share of rural areas in the workforce. This statement is incorrect.
Statement 3: Economic liberalization fostered growth in non-agricultural sectors. In rural areas, this led to significant growth in the non-farm economy (manufacturing, construction, trade, services), providing alternative sources of income and employment outside traditional agriculture. This statement is correct.
Statement 4: The growth rate in rural employment, particularly in agriculture, slowed down significantly after 1991 compared to the pre-reform period. While the non-farm sector absorbed some labor, overall rural employment growth often lagged behind the growth in the labor force, leading to concerns about jobless growth. This statement is correct.