CAPF AC 2022 Q111: Indian Economy – National Income & Economic Growth
- (a) U-shape
- (b) V-shape
- (c) K-shape
- (d) W-shape
Answer: (b) V-shape
Explanation
Shapes of economic recovery
How to think: the letter describes the shape of the GDP line.
A V means a sharp fall followed by an equally sharp rise.
The Economic Survey 2020-21 called India's bounce-back from the lockdown a V-shaped recovery.
| Shape | Meaning |
|---|---|
| V | Sharp fall, quick and strong recovery |
| U | Fall, a long stay at the bottom, then recovery |
| W | Recovery, a second fall, then recovery again (double dip) |
| K | Some sectors and groups recover while others keep falling |
| L | Fall with no recovery for a long time |
The numbers: GDP shrank by 23.9% in the first quarter of 2020-21 and by 7.5% in the second.
The Survey projected 11% real growth for 2021-22.
Answer: (b) V-shape.
Why each option is right or wrong
- (a) Incorrect. A U-shape means a long slow bottom before recovery.
- (b) CORRECT. The Economic Survey 2020-21 called it a V-shaped recovery.
- (c) Incorrect. K-shape was a term used by critics, not by the Survey.
- (d) Incorrect. A W-shape is a double-dip recession.
Key point
Economic Survey 2020-21 (theme: Saving Lives and Livelihoods): V-shaped recovery after the lockdown; Q1 −23.9%, Q2 −7.5%; full-year contraction estimated at 7.7%. Chief Economic Adviser: K. V. Subramanian.
Remember
Economic Survey 2020-21: V-shaped recovery.
Common mistakes
- Marking K-shape, which many commentators used but the Survey did not.
- Mixing up U (slow) with V (fast) recovery.
- Thinking the Survey admitted a double-dip, which is the W-shape.
Exam tip
Educated guess: a government survey will choose the most hopeful letter. The fall from 23.9% to 7.5% is a quick rebound, which is the V.
Sources
- Economic Survey 2020-21, Volume 2, Chapter 1: State of the Economy 2020-21: A Macro View
- Press Information Bureau, Ministry of Finance — Summary of the Economic Survey 2020-21 (29 January 2021)