With reference to the Indian economy after the 1991 economic liberalization, consider the following

Question

With reference to the Indian economy after the 1991 economic liberalization, consider the following statements:Worker productivity (rs. per worker at 2004-05 prices) increased in urban areas while it decreased in rural areas.The percentage share of rural areas in the workforce steadily increased.In rural areas, the growth in non-farm economy increased.The growth rate in rural employment decreased.Which of the statements given above is/are correct?

Accepted Answer

In NITI Aayog's paper Changing Structure of Rural Economy of India: Implications for Employment and Growth 2017, the following observations were made:The absolute level of income per worker i.e. worker productivity has increased for both rural and urban areas. For rural areas it was Rs. 37273 in 2004-05 and Rs. 101755 in 2011-12, while for urban areas it was Rs. 120419 in 2004-05 and Rs. 282515 in 2011-12. Hence statement 1 is incorrect.As per 2011 Census, 68.8% of India’s population and 72.4% of workforce resided in rural areas. However, steady transition to urbanization over the years has led to a decline in the rural share in the workforce, from 77.8% in 1993-94 to 70.9% in 2011-12. Hence statement 2 is incorrect.About two thirds of rural income is now generated in non-agricultural activities. The non-farm economy has increased in rural areas. The share of agriculture in rural economy has decreased from 57% in 1993-94 to 39% in 2011-12. Hence statement 3 is correct.After 2004-05, the rural areas have witnessed negative growth in employment despite high growth in output. The growth rate of rural employment was 1.45% during 1994-2005, which fell to -0.28% between 2005-12. Hence statement 4 is correct.Source Attribution: NITI Aayog: Changing Structure of Rural Economy of India Implications for Employment and Growth