Official Answer Key & Detailed Solution
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Correct Answer: Option (B) — 2, 3 and 4 only
Concept & Option Breakdown
Standard Reference Verified- Statement 1 is incorrect: Following the 1991 reforms, the relative share of agriculture in GDP consistently declined as industry and services expanded at a much faster pace.
- Statement 2 is correct: India's share in world merchandise and service exports increased from around 0.5% in 1990 to over 1.8% in subsequent decades.
- Statement 3 is correct: Liberalization of FDI caps and regulatory easing caused Foreign Direct Investment inflows to rise dramatically from under $100 million in 1990–91 to tens of billions annually.
- Statement 4 is correct: India's foreign exchange reserves surged from a precarious $5.8 billion in 1991 to over $600 billion in recent years.
The claim in statement 1 that the agricultural share of GDP 'increased enormously' directly contradicts standard economic development paths where the primary sector's relative GDP share declines.
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