Which of the following has/have occurred in India after its liberalization of economic policies in 1991?
- 1.Share of agriculture in GDP increased enormously.
- 2.Share of India’s exports in world trade increased.
- 3.FDI inflows increased.
- 4.India’s foreign exchange reserves increased enormously.
Select the correct answer using the codes given below:
Answer & explanation
Answer: (b) 2, 3 and 4 only
After 1991 India's exports, FDI inflows and foreign exchange reserves all rose sharply, while agriculture's share in GDP kept falling as industry and services grew faster. So statements 2, 3 and 4 are true and 1 is false.
- ✗ 1. The share of agriculture in GDP was on a decline, even though the workforce dependent on farming did not fall much. It did not increase.
- ✓ 2. India's share in world merchandise exports rose from 0.5 per cent in 1990 to 0.8 per cent in 2003, according to the Economic Survey 2005-06.
- ✓ 3. Opening the economy led to a rapid increase in foreign direct investment (FDI) and foreign institutional investment.
- ✓ 4. Foreign exchange reserves rose from about US $ 6 billion in 1990-91 to about US $ 646 billion in 2023-24, a very large increase.
Remember · Post-1991 India: agriculture's share in GDP fell, while exports, FDI and forex reserves rose sharply.
📘 Read it in NCERT: Class 11 Indian Economic Development, Ch 3 (practise this chapter) · Class 11 Indian Economic Development, Ch 5 (practise this chapter)
Sources
- NCERT Class 11 · Indian Economic Development, Chapter 3 “The opening of the economy has led to a rapid increase in foreign direct investment and foreign exchange reserves.”
- NCERT Class 11 · Indian Economic Development, Chapter 5 “although the share of agriculture sector's contribution to GDP was on a decline”
- Economic Survey 2005-06, Chapter 6 (External Sector), Ministry of Finance ↗ “India’s share in world merchandise exports, after rising from 0.5 per cent in 1990 to 0.8 per cent in 2003”
Question and answer: UPSC's official GS Paper I (2017, Series A) — paper ↗ · answer key ↗. Explanation: Minimalist IAS, checked 30 Sept 2026 (how we verify). ·