With reference to the Indian Economy after the 1991 economic liberalisation, consider the following statements:
- Worker productivity (rupees per worker at 2004-05 prices) increased in urban areas while it decreased in rural areas.
- The percentage share of rural areas in the workforce steadily increased.
- In rural areas, the growth in the non-farm economy increased.
- The growth rate in rural employment decreased.
Select the correct answer using the code given below:
- 1 and 2 only
- 3 and 4 only
- 3 only
- 1, 2 and 4
Explanation
Statement 1 is incorrect
- Worker productivity (rupees per worker at 2004-05 prices) increased in both urban areas and rural areas.
- For rural areas, it was Rs 37,273 in 2004-05 and Rs 62,589 in 2011-12.
- For Urban areas, it was Rs 1,20,419 in 2004-05 and Rs 1,74,525 in 2011-12.
Image Source: NITI Aayog
Statement 2 is incorrect
- The gradual shift towards urbanization over the years has resulted in a decrease in the proportion of the workforce engaged in rural areas, declining from 77.8% in 1993-94 to 70.9% in 2011-12.
Image Source: NITI Aayog (Share of rural areas in total NDP and workforce)
Statement 3 is correct
- In the post-reform period spanning from 1993-94 to 2004-05, the growth rate in the agricultural sector slowed down to 1.87%, while the non-farm economy experienced an accelerated growth rate of 7.93%.
Statement 4 is correct
- Despite the change in the rural economy, the non-farm sectors are not able to absorb job seekers because they are not able to generate jobs at the required rate. For example, during the pre-reform phase, rural employment grew at 2.16 per cent annually. This reduced in post-reform phase, despite a high economic growth.
