K.R. Narayanan, former President of India, said that GDP is not necessarily a measure of progress of a society. Which finding about India’s reform period best supports this view?
Answer & explanation
Correct answer: option 1
The correct answer is Option (1) → Growth increased the income and quality of consumption of only high-income groups and was concentrated in some select services.
If GDP rises but the gains reach only high-income groups and a few services, society as a whole has not progressed much. That finding supports the view that GDP is not a full measure of progress.
Option (1) Growth increased the income and quality of consumption of only high-income groups and was concentrated in some select services. — Correct. Growth left out agriculture and industry, which give livelihoods to millions.
Option (2) Foreign exchange reserves rose sharply, and India became one of the largest foreign exchange reserve holders in the world. — Incorrect. This is an achievement of the reforms. It says nothing about who gained from growth.
Option (3) The growth of GDP was mainly driven by the growth of the service sector. — Incorrect. This tells which sector drove growth, not whether society progressed.
Option (4) India came to be seen as a successful exporter of auto parts, pharmaceutical goods and IT software. — Incorrect. This is an export success, another gain of the reform period.
NCERT (2026-27): “There is a consensus in the world today that economic development is not all and the GDP is not necessarily a measure of progress of a society.” “3.7 Conclusion … Further, it has increased the income and quality of consumption of only high-income groups and the growth has been concentrated only in some select areas in the services sector such as telecommunication, information technology, finance, entertainment, travel and hospitality services, real estate and trade, rather than vital sectors such as agriculture and industry which provide livelihoods to millions of people in the country.” |