Which one of the following statements is correct with respect to the composition of national income in India?
- A.The share of manufacturing sector has declined.
- B.The share of services sector has increased sharply.
- C.The share of agriculture has remained static.
- D.The share of services sector has declined.
Correct answer
Explanation
The correct answer is B, the share of services sector has increased sharply. Since independence, and especially since the reforms of 1991, the services sector has grown faster than the rest of the economy and now produces more than half of India's gross value added.
In the early 1950s agriculture and allied activities made up roughly half of India's national income. Over the decades its share fell steadily as trade, transport, banking, information technology, telecom and other services expanded. This is why India is often described as having moved straight from an agriculture-led economy to a services-led one, without the long manufacturing phase seen in East Asia.
A is wrong: manufacturing's share has stayed broadly flat in a narrow band over recent decades rather than showing a clear decline. C is wrong: agriculture's share has fallen sharply, it has not stayed static. D is wrong: it states the opposite of what happened, since services have gained, not lost, share.
Exam tip: share in national income: agriculture fell, industry stayed flat, services rose to more than half.
Practice Questions
View allAccording to the law of diminishing marginal utility, as the amount of a good consumed increases, the marginal utility of that good tends to
- A.improve
- B.diminish
- C.remain constant
- D.first diminish and then improve
Show answer
Each extra unit of a good gives a consumer less additional satisfaction than the unit before it, so marginal utility falls as consumption rises.
Read the full explanation →Consider the following statements about impact of tax : 1. A tax is shifted forward to consumers if the demand is inelastic relative to supply. 2. A tax is shifted backward to producers if the supply is relatively more inelastic than demand. Which of the statements given above is/are correct?
- A.1 only
- B.2 only
- C.Both 1 and 2
- D.Neither 1 nor 2
Show answer
The burden of a tax falls more heavily on whichever side of the market is less elastic, the side that cannot easily walk away.
Read the full explanation →UBI, as an alternative for subsidies in poverty alleviation, stands for
- A.Union Basic Income
- B.Undefined Basic Income
- C.Unconditional Basic Income
- D.Universal Basic Income
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UBI is the idea of paying every citizen a fixed sum of money regularly, without conditions, in place of a large number of separate subsidies and welfare schemes.
Read the full explanation →Who among the following is the Chairman of the Fourteenth Finance Commission?
- A.C. Rangarajan
- B.Vijay Kelkar
- C.Y. V. Reddy
- D.Rakesh Mohan
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The Fourteenth Finance Commission, set up in 2013 for the award period 2015-2020, was chaired by Y. V. Reddy, a former Governor of the Reserve Bank of India.
Read the full explanation →Why was constitutional amendment needed for introducing GST?
- A.States were not willing to agree with the Union for introduction of GST without amendment in the Constitution.
- B.GST was to be implemented on concurrent base and Article 246 was inadequate for such a case.
- C.The Empowered Committee of Finance Ministers had recommended for constitutional amendment.
- D.The GST Council had recommended for constitutional amendment so that its power enhances.
Show answer
GST is levied by the Union and the States together on the same supply, and Article 246, which splits taxing powers between them through separate lists, did not allow such a concurrent tax.
Read the full explanation →