Practicing Success

Target Exam

CUET

Subject

Economics

Chapter

Indian Economic Development: Indian Economy:1950-1990

Question:

'Structural Change' in India is considered to be very peculiar. Which of the following statement corroborates this statement?

Options:

The share of the agricultural sector continues to be high despite the shift of the country from less developed category to developing category.

The share of the service sector in India is more than that of agriculture or industry, like what we find in developed nations.

Both 1 and 2

None of the above

Correct Answer:

The share of the service sector in India is more than that of agriculture or industry, like what we find in developed nations.

Explanation:

As a country undergoes development, it experiences a process called "structural change," which involves shifts in the relative importance of different sectors within the economy. In most cases, as a country develops, the share of agriculture in the economy decreases, and the industrial sector becomes dominant. At higher levels of development, the service sector tends to contribute the most to the Gross Domestic Product (GDP).

However, India's pattern of structural change is unique. Initially, as a poorer country, the share of agriculture in India's GDP was more than 50 percent, which is in line with expectations. But by 1990, the share of the service sector had surpassed that of agriculture or industry, resembling the trend seen in developed nations. This growing share of the service sector in India's economy was further accelerated in the post-1991 period.