Economic Growth: UPSC Previous Year Questions (Indian Economy)
12 previous year UPSC Prelims questions on economic growth are listed here, from 1996 to 2024. UPSC asks which measure best captures growth, how the sectors contribute to GDP, how national income is defined and how the tertiary sector has changed. The 2024 paper used pair questions on sectors and physical capital. The explanations define each measure.
Explanations state facts as of the year each question was asked; words like “recently” refer to that year.
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UPSC 1999Indian Economy · Economic Growth
Q11. Since 1980, the share of the tertiary sector in the total GDP of India has:
Explanation
Since 1980, the tertiary sector (services sector) has consistently shown an increasing trend in its contribution to India’s Gross Domestic Product (GDP). This transformation is largely attributed to the rapid expansion of IT services, telecommunications, financial services, trade, and tourism. The sector’s growth was further fueled by the liberalization policies of the 1990s, which opened up the Indian economy to global markets, fostering private sector participation and foreign investment in service-oriented industries. Additionally, advancements in technology, rising demand for skilled professionals, and urbanization significantly boosted the role of services, making it the largest contributor to India’s GDP by the late 1990s. This structural shift highlights India’s transition from an agrarian economy to one dominated by the services sector. As per the Economic Survey 1998-99, the services sector contributed nearly 45% to India’s GDP by the late 1990s, surpassing agriculture and industry as the key driver of economic growth.
Additional insight:
The share of the tertiary sector has risen from around 40% in the 1980s to more than 55% in recent years.
UPSC 1996Indian Economy · Economic Growth
Q12. Given below are two statements, one labelled as Assertion (A) and the other labelled as Reason (R): Assertion (A): Though India’s national income has gone up several fold since 1947, there has been no marked improvement in the per capita income level. Reason (R): Sizeable proportion of the population of India is still living below the poverty line. In the context of the above two statements, which one of the following is correct?
Explanation
Assertion (A) is false: Though India’s national income increased significantly since independence, per capita income also showed considerable improvement over the same period. While rapid population growth moderated the pace of per capita income growth, there was still a noticeable rise, disproving the assertion. Reason (R) is true: A sizable proportion of India’s population (almost 36% in 1996, around 5% in 2024) continues to live below the poverty line, limiting the equitable distribution of income. Poverty reduces individual economic capabilities, there-by keeping per capita income relatively stagnant despite overall growth in national income.
Additional insight:
As of the latest available data, India’s economic indicators have shown significant growth:
Per Capita Net National Income (NNI): According to the National Statistical Office (NSO), India’s per capita NNI at current prices was estimated at 1,69,145 and 1,88,892 respectively for the years 2022-23 and 2023-24 nearly doubling from 86,647 in 2014-15. Per Capita GDP: The International Monetary Fund (IMF) reported India’s per capita GDP at approximately $2,940 in 2024. These figures reflect India’s robust economic expansion and improvements in individual income levels over recent years.
Answer key for these questions
Q
UPSC year
Correct answer
11
1999
(a) shown an increasing trend
12
1996
(d) A is false but R is true
What UPSC has tested in Economic Growth
Per capita real income is the most appropriate measure of economic growth.
Since 1980, the share of the tertiary (services) sector in India’s GDP has shown an increasing trend.
Rise in absolute and per capita real GNP does not connote a higher level of development if distribution and welfare do not improve.
Dairy farming and mineral exploration are primary activities, weaving cloth is secondary and storage of agricultural produce is tertiary, as the 2024 pairs asked.
Frequently asked questions
How many previous year UPSC questions are there on Economic Growth?
This page covers 12 previous year UPSC Prelims GS Paper-I questions on Economic Growth (Indian Economy), asked from 1996 to 2024. Each has the correct answer and an explanation.
What is the most appropriate measure of economic growth?
Per capita real income, because it adjusts the rise in output for both inflation and population growth. A rise in total GDP alone can mislead if population grows as fast or faster.
Which sector has the largest share of India’s GDP?
The tertiary or services sector. Since 1980 its share has shown an increasing trend, and it now contributes more than half of GDP, ahead of industry and agriculture.
Why can a rise in GNP not mean higher development?
Because development also depends on how widely gains are shared and on health, education and employment. A higher real GNP with rising inequality or unmet basic needs does not show better living standards.
