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 I. Explanation: Minimalist IAS, checked 25 Oct 2026 (how we verify). ·
