UPSC Prelims 2010 Q148: Indian Economy – National Income & Economic Growth
- (a) 1 only
- (b) 2 only
- (c) Both 1 and 2
- (d) Neither 1 nor 2
Answer: (b) 2 only
Explanation
Checking two claims about India's economy over a decade
These statements examine GDP growth and the public sector's share over a specific 10-year period.
| Statement | Verdict | Reason |
|---|---|---|
| 1. GDP increased by four times in the last 10 years | Incorrect | While India's nominal GDP did grow substantially, the specific claim of an exact 'four times' increase over this precise period is an overstated, imprecise figure not matching the actual data closely enough to be treated as correct |
| 2. Public sector's share of GDP declined in the last 10 years | Correct | With continued economic liberalization, the private sector's relative contribution to GDP grew faster, causing the public sector's percentage share to decline |
India's economic trends (over the relevant decade):
| Point | Detail |
|---|---|
| GDP growth | Substantial, but not precisely a clean 'four times' multiplier as stated |
| Public sector GDP share | Declined, as private-sector growth outpaced it |
Answer: (b) 2 only.
Why each option is right or wrong
- (a) Incorrect. Statement 2 (declining public-sector GDP share) is also correct, so '1 only' is both inaccurate on content and incomplete.
- (b) CORRECT. The public sector's declining GDP share is accurate; the precise 'four times' GDP growth claim in statement 1 is overstated.
- (c) Incorrect. Statement 1's specific multiplier claim is not accurate, so 'both' cannot be correct.
- (d) Incorrect. Statement 2 is accurate, so 'neither' is wrong.
Key point
India's public sector share of GDP DID decline over the decade due to faster private-sector growth — but the precise claim that GDP grew 'exactly four times' in that period is an overstated figure, not accurate as stated.
Remember
India's public sector GDP share declined over the decade (due to faster private-sector growth) — but the 'GDP increased exactly four times' claim is an overstatement.
Common mistakes
- Accepting a precise numeric multiplier claim (like 'four times') at face value without checking it against actual data.
- Missing the genuine, well-documented declining public-sector GDP share trend from continued liberalization.
- Assuming both statements in an exam question must be either both true or both false.
Exam tip
Precise numeric claims ('exactly four times') deserve scrutiny — but the broader, qualitative trend of a declining public-sector GDP share is well-documented and accurate.
Sources
- Central Statistical Organisation — National Accounts Statistics 2010
- Ministry of Finance, Government of India — Economic Survey 2009–10 (National Income, Saving and Investment)