UPSC Prelims 2003 Q102: Indian Economy – External Sector & Balance Of Payments
Assertion (A): During the year 2001 - 02, the value of India’s total exports declined,
registering a negative growth of 2.17%.
Reason (R): During the year 2001 - 02, negative growth in exports was witnessed in respect of iron
and steel, coffee, textiles and marine products.
- (a) Both A and R are individually true and R is the correct explanation of A
- (b) Both A and R are individually true but R is NOT the correct explanation of A
- (c) A is true but R is false
- (d) A is false but R is true
Answer: (d) A is false but R is true
Explanation
> Note for students: The question cites a 2.17% decline; the commonly quoted dollar-terms decline was about 1.6%, so the assertion is treated as false.
India's exports in 2001-02
| Part | Verdict |
|---|---|
| A. Exports declined with a negative growth of 2.17% in 2001-02 | False as the figure is stated; the decline was about 1.6% in dollar terms |
| R. Negative growth was witnessed in iron and steel, coffee, textiles and marine products | True — several commodity groups fell |
A is not accepted because the decline in 2001-02 was about 1.6 percent rather than 2.17 percent, while R is true.
Answer: (d) A is false but R is true.
Why each option is right or wrong
- (a) Incorrect. A is false as stated, so R cannot explain it.
- (b) Incorrect. A is not accepted as stated.
- (c) Incorrect. R is true, so this code is wrong.
- (d) CORRECT. A is false because the exports fell by about 1.6 percent, while R is true.
Key point
2001-02: exports $44.7 bn, down 1.6 percent; imports $51.4 bn.
Remember
India's exports fell by about 1.6 percent in 2001-02.
Common mistakes
- Quoting the wrong percentage of decline.
- Mixing the dollar and rupee growth rates.
- Thinking that exports rose in the year 2001-02.
Exam tip
Check the exact figure when a number is part of the assertion.
Sources
- Economic Survey 2002-03 — external sector
- Reserve Bank of India — Annual Report 2001–02 (External Sector)