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:

[UPSC Civil Services Exam – 2017 Prelims]

(a) 1 and 4 only

(b) 2, 3 and 4 only

(c) 2 and 3 only

(d) 1, 2, 3

Answer: (b)        

Explanation:

• The contribution of India’s agriculture sector to the country’s economy has indeed witnessed a gradual decline following economic reforms. Agriculture, which was traditionally a significant occupation in India, now contributes approximately 15% to the GDP, down from 29% in 1991. Hence, statement 1 is not correct.
• The opening up of the Indian economy has resulted in substantial growth in foreign direct investment (FDI) and foreign exchange reserves. FDI has increased by 150%, and foreign exchange reserves have grown by 20 times. Therefore, statements 3 and 4 are correct.
• During the reform period, India has emerged as a successful exporter of various products such as IT software, auto parts, textiles, and engineering goods. Consequently, statement 2 is also correct.