Jasvin ThinksPracticeMock testsCurrent affairs

UPSC Prelims 2001 Q30: Indian Economy – IT & Services Sector

UPSC Prelims 2001, General Studies Paper I · Indian Economy

Assertion (A): India's software exports increased at an average growth rate of 50% since 1995 - 96. Reason (R): Indian software companies were cost - effective and maintained international quality.
  1. (a) Both A and R are individually true, and R is the correct explanation of A
  2. (b) Both A and R are individually true, but R is NOT a correct explanation of A
  3. (c) A is true, but R is false
  4. (d) A is false, but R is true

Answer: (a) Both A and R are individually true, and R is the correct explanation of A

Explanation

Assertion-Reason: growth of India's software exports since 1995-96

StatementVerdict
A. Software exports grew at an average of about 50% a year since 1995-96True — exports rose from about US$ 0.75 billion (1995-96) to about US$ 4 billion (1999-2000)
R. Indian software firms were cost-effective and kept international qualityTrue — low costs and quality certification (SEI-CMM, ISO 9000)
LinkCost and quality made Indian firms the choice for outsourcing, including Y2K work
Data sourceNASSCOM and the Economic Survey

In the late 1990s India's software exports grew at about 50% a year. The reason was that Indian companies were cost-effective and met international quality standards, which made them attractive for outsourcing. So R explains A.

Answer: (a) Both A and R are individually true, and R is the correct explanation of A.

Why each option is right or wrong

Key point

Software Technology Parks of India (1991) and the Y2K demand drove the 1990s IT boom.

Remember

Late-1990s software exports grew about 50% a year on cost and quality.

Common mistakes

Exam tip

When R gives the obvious business reason for a growth fact, it usually explains A.

Sources

Practise UPSC Prelims PYQsTake a timed mock