Correct answer: (d) Neither 1 nor 2
Explanation
- A
1 only
Option (a) is 1 only. Tax revenue as a percent of GDP did not rise steadily through the decade before 2017; it fluctuated with growth, tax reform and the crisis years. Statement 1 is false. This option is not the key.
- B
2 only
Option (b) is 2 only. Fiscal deficit as a percent of GDP also did not increase steadily; India ran a large deficit around 2008–13 then consolidated. Statement 2 is false. This option is not the key.
- C
Both 1 and 2
Option (c) is both. Neither ratio was a monotonic decade-long rise. This option is therefore wrong.
- D
Neither 1 nor 2
Neither statement is correct: both tax/GDP and fiscal deficit/GDP moved up and down rather than steadily increasing over the last decade (as of 2017). That is why (d) is the official key.
Summary. Official key is (d) Neither 1 nor 2. 'Steadily increased' is a strong claim. India’s tax-to-GDP ratio wobbled, and the fiscal-deficit ratio spiked after the global crisis then was brought down under FRBM-type paths. Prelims punishes the word steadily. Both statements fail.
Same topic · past papers
UPSC has asked this before
These previous-year questions sit on the same topic. Open one to practise the earlier ask.
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2025 · Q61 · General Studies · 2 marks
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With reference to the Indian economy after the 1991 economic liberalization, consider the following statements: 1. Worker productivity (rs. per worker at 2004-05 prices) increased in urban areas while it decreased in rural areas. 2. The percentage share of rural areas in the workforce steadily increased. 3. In rural areas, the growth in non-farm economy increased. 4. The growth rate in rural employment decreased Which of the statements given above is/are correct? -
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With reference to Indian economy, consider the following statements: 1. The rate of growth of Real Gross Domestic Product has steadily increased in the last decade. 2. The Gross Domestic Product at market prices (in rupees) has steadily increased in the last decade. Which of the statements given above is/are correct?