With reference to Indian economy, consider the following statements: 1. The rate of growth of Real Gross Domestic Product has steadily increased in the last decade. 2. The Gross Domestic Product at market prices (in rupees) has steadily increased in the last decade. Which of the statements given above is/are correct?

UPSC Prelims 2015: With reference to Indian economy, consider the following statements: The rate of growth of Real… — Answer & Explanation

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With reference to Indian economy, consider the following statements:

1.The rate of growth of Real Gross Domestic Product has steadily increased in the last decade.
2.The Gross Domestic Product at market prices (in rupees) has steadily increased in the last decade.

Which of the statements given above is/are correct?

Answer & explanation

Answer: (b) 2 only

Only statement 2 is correct. Real GDP growth did not rise steadily: it was 6.7% in 2008-09, 8.6% in 2009-10 and 8.9% in 2010-11, then fell to 6.7% in 2011-12 and 4.5% in 2012-13. GDP in rupees at current prices kept rising every year, because it captures both output growth and price rise.

✗ 1. The official series for real GDP growth at factor cost reads 6.7, 8.6, 8.9, 6.7 and 4.5% for 2008-09 to 2012-13. A steady increase would need the rate to rise every year. Instead it rose and then fell sharply, so the statement is wrong.
✓ 2. GDP at current prices kept rising every year. GDP at factor cost at current prices went from ₹83.92 lakh crore in 2011-12 to ₹93.89 lakh crore in 2012-13 and ₹104.73 lakh crore in 2013-14. GDP at market prices is this figure plus net indirect taxes, and it also rose every year. Even when real growth slowed, rising prices kept the rupee value climbing.

Remember · Real GDP growth is a rate, and a rate can fall while GDP in rupees keeps rising. India's real growth went 8.9% (2010-11) → 6.7% → 4.5% (2012-13), yet nominal GDP rose every year.

Sources

Economic Survey 2013-14, Statistical Appendix, Table 1.4: Annual Growth Rate of Real GDP at Factor Cost ↗ “2008-09 0.4 4.7 7.5 12.0 12.5 6.7 2009-10 1.5 9.5 10.4 9.7 11.7 8.6 2010-11(3R) 8.3 7.6 12.2 10.0 4.2 8.9 2011-12(2R) 4.4 8.5 4.3 11.3 4.9 6.7 2012-13(1R) 1.0 1.2 5.1 10.9 5.3 4.5 … 2011-12(2R) 1721814 2061650 2072272 1381524 1154431 8391691 2012-13(1R) 1867342 2238029 2324695 1617076 1341734 9388876 2013-14(PE) 2129000 2371520 2509907 1939482 1522898 10472807”

Question: UPSC Civil Services (Preliminary) 2015, General Studies paper. Explanation: Minimalist IAS, checked 25 Oct 2026 (how we verify). ·

With reference to Indian economy, consider the following statements: The rate of growth of Real…

Prelims 2015 · archive

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