In the context of Indian economy consider the following statements : 1. The growth rate of GDP has steadily increased in the last five years. 2. The growth rate in per capita income has steadily increased in the last five years. Which of the statements given above is/are correct?

QUESTION

Medium

Economy

Prelims 2011

In the context of Indian economy consider the following statements :

The growth rate of GDP has steadily increased in the last five years.
The growth rate in per capita income has steadily increased in the last five years.

Which of the statements given above is/are correct?

Select an option to attempt

Explanation

Statement 1 is incorrect. In the five-year period preceding the time when this question was originally asked (around 2005–06 to 2009–10), India’s GDP growth rate did not increase steadily. It declined sharply during the 2008–09 global financial crisis and then recovered, showing a fluctuating trend rather than a steady increase.

Statement 2 is also incorrect. The growth rate of per capita income followed a similar pattern, declining during the global financial crisis and recovering afterward. Hence, it also did not show a steady upward trend.

Note for present-day learners: Even in the current context, India’s GDP growth rate and per capita income growth rate have not shown a steady year-on-year increase over any recent five-year period due to shocks such as COVID-19, global economic slowdown, and recovery cycles. Therefore, the core idea tested by this question remains relevant even today: these growth rates tend to fluctuate rather than rise monotonically.

Therefore, the correct answer is (d) Neither 1 nor 2.

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