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Question

With reference to the Indian economy after the 1991 economy liberalization, consider the following statements:

1. Worker productivity (₹ per worker at 2004-05 price) increase in urban areas while it decreased in rural areas.
2. the percentage share of rural areas in 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 statement give 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

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Explanation:

1. Statement 1 is incorrect. After the 1991 economic liberalization in India, worker productivity increased both in urban and rural areas. The statement incorrectly states that it decreased in rural areas.

2. Statement 2 is incorrect. The percentage share of rural areas in the workforce has been declining over time, not steadily increasing. This is due to the gradual shift of population from rural to urban areas and the expansion of non-farm employment opportunities.

3. Statement 3 is correct. After the 1991 economic liberalization, there has been an increase in the non-farm economy in rural areas. This includes the growth of various industries and services, contributing to employment opportunities beyond traditional agriculture.

4. Statement 4 is correct. The growth rate in rural employment has slowed down after the 1991 reforms. This is due to various factors such as mechanization of agriculture, increased productivity, and the shift of population to urban areas in search of better opportunities. The slower growth in rural employment has been a challenge in ensuring inclusive development in rural areas.

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