Question

With reference to the Indian economy after the 1991 economic liberalization, consider the following statements:

1. Worker productivity (Rs. per worker at 2004-05 prices) increased in urban areas while it decreased in rural areas.

2. The percentage share of rural areas in the workforce steadily increased.

3. In rural areas, the growth in the non-farm economy increased.

4. The growth rate in rural employment decreased.

Which of the statements given above is/are correct?

1. 1 and 2 only
2. 3 and 4 only
3. 3 only
4. 1, 2 and 4 only

Answer 1

Correct Answer - Option 2 : 3 and 4 only

The correct answer is 3 and 4 only.

• As per NITI Ayog's report, worker productivity has increased for both rural and urban areas. 
• Consider the data shown below-For rural areas it was Rs. 37273 in 2004 -05 and Rs. 101755 in 2011 -12, while for urban areas it was Rs. 120419 in 2004 -05 and Rs. 282515 in 2011 -12. Hence statement 1 is incorrect.
• Steady transition to urbanization over the years has led to a decline in the rural share in the workforce, from 77.8% in 1993 -94 to 70.9% in 2011 -12. Hence statement 2 is incorrect.

• The rural share in the total workforce declined steadily from 76.1 per cent in 1999-00 to 70.9 per cent in 2011-12.
• As evident from the table below, the share of the non-farm economy increased in rural areas.
  • Share of rural areas in total NDP and workforce (per cent):

Year	Economy	Workforce
2011-12	46.9	70.9
2004-05	48.1	74.6
1999-00	48.1	76.1
1993-94	54.3	77.8

• Hence 3 is correct.
• Also, the growth rate of rural employment decreased (becoming negative in 2005-12). Hence 4 is correct.