National income, growth & inflation

Answer: (b) 3 and 4 only

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.

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 · Report an error

Answer: (a) 1 and 2 only

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.

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 · Report an error

Answer: (a) long-term damage done by a tonne of CO2 emissions in a given year.

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.

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 · Report an error