1. The share of agriculture in GDP increased enormously.
2. The 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:
Explanation
Statement 1 is incorrect: India’s agriculture sector has shown a gradual decline in contribution to the Indian economy post-reform. India’s traditional occupation, agriculture, currently makes up only 15% of the GDP, down from 29% in 1991.
Statement 2 is correct: India is seen as a successful exporter of IT software, auto parts, textiles, and engineering goods in the reform period. Thus, the share of India’s exports in world trade increased after its liberalisation of economic policies in 1991. India’s share in world exports was around 0.5% in 1990 and increased to approximately 1.85% by 2023 (PwC report).
Statement 3 is correct: The Foreign investments including FDI and FII have increased from about US $ 100 million in 1990-91 to US $ 467 billion in 2012-13.
Statement 4 is correct: The opening up of the economy has led to rapid increase in foreign exchange reserves. In 1991, India had only $5.8 billion in forex reserves, which were insufficient to cover imports for even three weeks. As of 2012-13, forex re-serves had grown to over $292 billion (RBI data).The trend has continued, and as of January 2024, forex reserves are over $620 billion. The increase is due to higher exports, remittances, FDI inflows, and better economic management post-liberalization.
For S1 and S4, Increased enormously" = trap word. It makes both statements extreme and likely false.