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?
- A1 and 2 only
- B3 and 4 onlyCorrect
- C3 only
- D1, 2 and 4 only
Explanation
Let's analyze the statements regarding the Indian economy after the 1991 economic liberalization:
-
Worker productivity (₹ per worker at 2004-05 prices) increased in urban areas while it decreased in rural areas. This statement is generally incorrect. Post-1991, economic reforms and technological advancements led to overall productivity improvements. While urban areas might have seen more rapid productivity growth in organized sectors, it's not accurate to state a decrease in rural areas. Productivity improvements, albeit at varying rates, could be observed in some rural non-farm sectors as well.
-
The percentage share of rural areas in the workforce steadily increased. This statement is incorrect. With economic growth and urbanization, there has been a long-term trend of a decline in the percentage share of the rural workforce in the total workforce, as people migrate to urban areas and the economy diversifies away from agriculture.
-
In rural areas, the growth in non-farm economy increased. This statement is correct. Post-1991, there was a significant diversification of rural livelihoods. The non-farm sector (e.g., construction, manufacturing, rural services, trade) witnessed substantial growth, contributing increasingly to rural incomes and employment as agriculture's share of GDP declined.
-
The growth rate in rural employment decreased. This statement is correct. Despite growth in the non-farm sector, the overall growth rate of rural employment has often stagnated or declined in certain periods post-1991, leading to concerns about 'jobless growth' or insufficient employment generation to absorb the growing rural workforce, particularly in agriculture.
Therefore, statements 3 and 4 are correct.

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