Question

In the context of Indian economy, consider the following statements:

1. The growth rate of GDP has steadily increased in the last five years.

2. The growth rate in per capita income has steadily increased in the last five years.

Which of the statements given above is/are correct?

1. 1 only
2. 2 only
3. Both 1 and 2
4. Neither 1 nor 2

Answer 1

Correct Answer - Option 4 : Neither 1 nor 2

The correct answer is Neither 1 nor 2.

• Gross domestic product (GDP) is the standard measure of the value-added created through the production of goods and services in a country during a certain period.
• It is the sum of gross value added by all resident producers in the economy plus any product taxes and minus any subsidies not included in the value of the products.
• The growth rate of GDP-
  • 2016- 8.26%
  • 2017- 7.04%
  • 2018- 6.12%
  • 2019- 4.18%
  • 2020- -10.29%
• As we can see, it has not been increasing for five years. Hence, statement 1 is not correct.
• GDP per capita is the gross domestic product divided by the midyear population of the country.
• The growth rate in per capita income-
  • 2016- 7.4%
  • 2017- 9.7%
  • 2018- 8.6%
  • 2019- 10.0%
  • 2020- 4%
• As we can see, it has not been increasing for five years. Hence, statement 2 is not correct.