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Economy & social development

Prelims · Economy & social development · 24 questions

National income, growth & inflation

Every UPSC Prelims question on this topic, 2016–2026, newest first. Tap an option to check yourself; the answer and explanation open below it.

National income, growth & inflation questions per year: 2016: 0, 2017: 0, 2018: 2, 2019: 2, 2020: 2, 2021: 2, 2022: 1, 2023: 0, 2024: 2, 2025: 0, 2026: 0 Asked in 6 of 11 years · most in 2024 (2)

Practising Economy & social development? Take it as timed sets of 25 →

UPSC syllabus: “Economic and Social Development-Sustainable Development, Poverty, Inclusion, Demographics, Social Sector Initiatives, etc.” Sub-topics in the detailed syllabus →

Prelims 2020 · Q58

Hard

1991 के आर्थिक उदारीकरण के बाद की भारतीय अर्थव्यवस्था के संबंध में, निम्नलिखित कथनों पर विचार कीजिए :

  1. 1.शहरी क्षेत्रों में श्रमिक की उत्पादकता (2004 – 05 की कीमतों पर प्रति श्रमिक ₹) में वृद्धि हुई जबकि ग्रामीण क्षेत्रों में इसमें कमी हुई ।
  2. 2.कार्यबल में ग्रामीण क्षेत्रों की प्रतिशत हिस्सेदारी में सतत वृद्धि हुई ।
  3. 3.ग्रामीण क्षेत्रों में, ग़ैर-कृषि अर्थव्यवस्था में वृद्धि हुई ।
  4. 4.ग्रामीण रोज़गार की वृद्धि दर में कमी आई ।

उपर्युक्त कथनों में से कौन-सा/से सही है/हैं ?

Read this question in English

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

1. Worker productivity (₹ 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 non-farm economy increased.

4. The growth rate in rural employment decreased.

Which of the statements given above is/are correct?

(a) 1 and 2 only · (b) 3 and 4 only · (c) 3 only · (d) 1, 2 and 4 only

उत्तर और व्याख्या · explanation in English

Answer: (b) केवल 3 और 4

After liberalisation, rural India's non-farm economy grew faster while rural employment growth slowed and even turned negative, so statements 3 and 4 are correct. Statements 1 and 2 are wrong: output per worker rose in rural areas too, and the rural share of the workforce kept falling.

  • ✗ 1. Rural productivity did not fall. Rural output at 2004-05 prices rose from Rs 3,199 billion (1970-71) to Rs 21,107 billion (2011-12) while rural employment rose only from 191 to 336 million, so output per rural worker went up from about Rs 16,700 to about Rs 62,800 (our calculation from these figures).
  • ✗ 2. The rural share of the workforce fell, from 84.1 per cent in 1970-71 to 70.9 per cent in 2011-12, as urbanisation proceeded.
  • ✓ 3. Growth of rural non-farm output rose from 5.70 per cent a year (1971-94) to 7.93 per cent (1994-2005) and 9.21 per cent (2005-12), while agriculture lagged.
  • ✓ 4. Total rural employment growth fell from 2.16 per cent a year (1973-94) to 1.45 per cent (1994-2005) and turned negative (-0.28 per cent) in 2005-12.

Remember · Since liberalisation, rural non-farm output has grown faster and faster, but rural employment growth has fallen; the rural share of India's workforce has kept declining.

Sources

  • NITI Aayog Discussion Paper, Changing Structure of Rural Economy of India (Chand, Srivastava and Singh, November 2017) ↗ “During the post-reform period (1993-94 and 2004-05), growth in agricultural sector decelerated to 1.87 per cent, whereas growth rate in non-farm economy accelerated to 7.93 per cent. … After 2004-05, the rural areas have witnessed negative growth in employment in- spite of high growth in output. … However, steady transition to urbanization over the years is leading to the decline in the rural share in population, workforce and GDP of the country. … India‟s rural economy expanded from Rs. 229 billion to Rs. 34167 billion at current prices and from Rs. 3199 billon to Rs. 21107 billion at 2004-05 prices. In the same period, employment expanded from 191 million to 336 million.”

Question and answer: UPSC's official GS Paper I (2020, Series A) — paper ↗ · answer key ↗. Explanation: Minimalist IAS, checked 30 Sept 2026 (how we verify). Permalink ·

Prelims 2020 · Q67

Medium

निम्नलिखित कथनों पर विचार कीजिए :

  1. 1.खाद्य वस्तुओं का ‘उपभोक्ता मूल्य सूचकांक’ (CPI) में भार (weightage) उनके ‘थोक मूल्य सूचकांक’ (WPI) में दिए गए भार से अधिक है ।
  2. 2.WPI, सेवाओं के मूल्यों में होने वाले परिवर्तनों को नहीं पकड़ता, जैसा कि CPI करता है ।
  3. 3.भारतीय रिज़र्व बैंक ने अब मुद्रास्फीति के मुख्य मान हेतु तथा प्रमुख नीतिगत दरों के निर्धारण और परिवर्तन हेतु WPI को अपना लिया है ।

उपर्युक्त कथनों में से कौन-सा/से सही है/हैं ?

Read this question in English

Consider the following statements:

1. The weightage of food in Consumer Price Index (CPI) is higher than that in Wholesale Price Index (WPI).

2. The WPI does not capture changes in the prices of services, which CPI does.

3. Reserve Bank of India has now adopted WPI as its key measure of inflation and to decide on changing the key policy rates.

Which of the statements given above is/are correct?

(a) 1 and 2 only · (b) 2 only · (c) 3 only · (d) 1, 2 and 3

उत्तर और व्याख्या · explanation in English

Answer: (a) केवल 1 और 2

Statements 1 and 2 are correct, and 3 is wrong. Food has a far larger weight in CPI (45.86 per cent in the combined index) than in WPI (24.38 per cent), and WPI tracks goods only, so it misses services that CPI includes. The RBI's inflation target is fixed in terms of CPI, not WPI.

  • ✓ 1. In CPI (base 2012, combined) food and beverages carry a weight of 45.86 per cent; the WPI Food Index has a weight of 24.38 per cent.
  • ✓ 2. WPI covers commodities, and RBI's expert committee noted that it does not capture price movements in services such as those in the CPI basket (housing, health, transport and communication).
  • ✗ 3. Under Section 45ZA of the RBI Act the Central Government sets the inflation target in terms of CPI (4 per cent, with a 2 to 6 per cent band, notified in August 2016), and the RBI works to it.

Remember · CPI measures retail prices, has a heavy food weight, includes services and is the RBI's inflation-target anchor. WPI is wholesale prices of goods only, with a lighter food weight.

Sources

Question and answer: UPSC's official GS Paper I (2020, Series A) — paper ↗ · answer key ↗. Explanation: Minimalist IAS, checked 30 Sept 2026 (how we verify). Permalink ·

Prelims 2020 · Q85

X-Ray · Core #3 Easy

निम्नलिखित में से कौन-सा कथन ‘कार्बन के सामाजिक मूल्य’ पद का सर्वोत्तम रूप से वर्णन करता है ?

आर्थिक मूल्य के रूप में यह निम्नलिखित में से किसका माप है ?

Read this question in English

Which one of the following statements best describes the term ‘Social Cost of Carbon’?

It is a measure, in monetary value, of the

(a) long-term damage done by a tonne of CO2 emissions in a given year. · (b) requirement of fossil fuels for a country to provide goods and services to its citizens, based on the burning of those fuels. · (c) efforts put in by a climate refugee to adapt to live in a new place. · (d) contribution of an individual person to the carbon footprint on the planet Earth.

उत्तर और व्याख्या · explanation in English

Answer: (a) प्रदत्त वर्ष में एक टन CO₂ के उत्सर्जन से होने वाली दीर्घकालीन क्षति

The Social Cost of Carbon is the money value of the long-term damage caused by one extra tonne of carbon dioxide emitted in a given year. Governments use it to weigh the benefits of cutting emissions against the costs of a policy.

  • ✓ (a) This is the standard definition: a measure, in money terms, of the long-term damage done by a tonne of CO2 emitted in a given year; the same figure equals the damage avoided by cutting that tonne.
  • ✗ (b) This describes a country's fossil-fuel demand, which is not a monetary damage measure.
  • ✗ (c) The cost of adaptation by a climate refugee is not what the term measures; it values damage from emissions.
  • ✗ (d) An individual's contribution is a personal carbon footprint, not the Social Cost of Carbon.

Remember · Social Cost of Carbon = money value of the long-term damage from one extra tonne of CO2 emitted in a year; equally, the benefit of avoiding it.

Sources

Question and answer: UPSC's official GS Paper I (2020, Series A) — paper ↗ · answer key ↗. Explanation: Minimalist IAS, checked 30 Sept 2026 (how we verify). Permalink ·

The Syllabus X-Ray of this topic

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  • HighSectors, capital & planning basics · 5 questions
  • HighInflation & price indices · 3 questions

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