UPSC Prelims 2017 – Question 77

Here is Question No. 77 a part of our series on UPSC Prelims 2017

Q77. Which of the following has/have occurred in India after its liberalization of economic policies in 1991?

1. Share of agriculture in GDP increased enormously.
2. Share of India’s exports in world trade increased.
3. FDI inflows increased.
4. India’s foreign exchange reserves increased enormously

Select the correct answer using the codes given below:
a) 1 and 4 only
b) 2, 3 and 4 only
c) 2 and 3 only
d) 1, 2, 3 and 4

The correct answer is 2, 3 and 4 only. 

• India’s agriculture sector has gradually reduced its contribution to the Indian economy. 
• Agriculture, India’s traditional occupation, now accounts for about 15% of GDP, down from 29% in 1991. Hence, statement 1 is incorrect. 
• The economy’s opening has resulted in a 150 per cent increase in foreign direct investment (FDI) and foreign exchange reserves (by 20 times). 
• Foreign investment, which includes both direct and indirect investment, has increased from approximately US $ 100 million in 1990-91 to approximately US $ 150 billion in 2003-04. Hence, statements 3 and 4 are correct. 
• During the reform period, India is regarded as a successful exporter of IT software, auto parts, textiles, and engineering goods. Hence, statement 2 is correct.

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