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CA Foundation · Business Economics · Indian Economy

Which statement best describes the pattern of structural change in India's economy since independence, compared with the typical development path of many other economies?

India's structural change has been marked by a rapid rise of services in GVA while manufacturing's share stayed modest, so the economy skipped a large industrial phase. This differs from the usual path where industry expands first and services dominate later.

  1. AThe economy moved from agriculture directly to services, with manufacturing's share staying comparatively modestCorrect
  2. BThe economy moved from agriculture to manufacturing and only later to services
  3. CThe share of services has fallen steadily as agriculture has grown
  4. DManufacturing has become the largest employer and largest contributor to GVA

Explanation

Many economies shift from agriculture to industry and then to services. India's services sector grew rapidly in output while manufacturing's share remained fairly stable and modest, so the economy is often said to have leapfrogged to services. The other options contradict observed trends.

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