Question

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 the non-farm economy increased

4. The growth rate in rural employment decreased.

Which of the statements given above is/are correct?

(a) 1 and 2 only

(b) 3 and 4 only

(c) 3 only

(d) 1, 2 and 4

Answer 1

Correct option is (b) 3 and 4 only

After the LPG reforms of 1991 it is inevitable that the rural/agriculture workforce would start shifting towards urban/non-agri sectors. So that means 2 is wrong and 3 should be correct. 

Since the total number of workers have remained more or less the same but # of rural workers declined, That means their Percentage share also declined, And it will also hint that growth rate in Rural Employment has decreased. so Statement 2 is wrong while 4 is correct. Only option b fits into this pattern.