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Direction: Read the following passage carefully and answer the question. On attending a conference, which focused on the role of the services sector in Indian economy I was amazed. The conference…

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Direction: Read the following passage carefully and answer the question.

On attending a conference, which focused on the role of the services sector in Indian economy I was amazed. The conference gave a very interesting perspective on the role of the service sector in the growth of Indian economy in relation of growth rates in agriculture and industry.

The current situation in India is that the growth rate of services has overtaken both agriculture and industry and is now contributing to more than 50% of GDP. The service sector has the highest growth rate and is the least volatile sector. Growth is particularly marked in public services, IT and financial services. In some areas, the growth rate of the service sector is 40-50% due to increased use of mobile technologies. India, therefore, has a service-oriented economy. It hasn’t followed traditional growth models as in China. However, in the process of doing so it has skipped the manufacturing stage and has jumped straight from the agriculture stage to service stage, which is also the main reason for the expansion of the service sector.

In fact, the situation now is such that the growth in the service sector can and will support in the agriculture and industrial sectors. However, the only setback for Indian economy is the lack of growth in the manufacturing sector which causes dependence on other countries, which is not so desirable in terms of job creation and increased prosperity. Population is also a major concern of the Indian economy. As the population of India grows so also does the number of dependents in the population in both the lower and higher age groups. In such a scenario of increasing population, especially in an economy which is still recovering from crisis, growth becomes difficult. For such an economy to grow it has to invest.

Currently, the public sector invests more than it saves. The household sector saves in surplus, but it is not increasing so it cannot continue to support private and public sectors. There is a massive need to spend on agriculture and infrastructure development of the country. Apart from that, health and education should also be the priority of the government particularly the education of women in order to reduce the birth rate.

The full article (of which only an extract is reproduced here) goes on to say that, because of these population trends, "a 'growth window' for India will open". In the light of the passage's discussion of dependents in the population, what does the author most likely mean by this statement?
  1. In the coming years, the Indian economy will grow as the service sector of the country would be booming due to the focus of the government in that sector
  2. In the next two decades, Indian economy will have an opportunity to grow as the working population of India will be high as compared to the dependant population
  3. There would be only a small period of time in which the economy of India has to grow and if it fails to do it will never be able to recover from the economic downfall
  4. Only upto the next two decades would Indian people be interested in finding jobs in the country beyond which they would search for jobs abroad thus, hampering the growth of Indian economy

Answer and explanation

Correct answer: B - In the next two decades, Indian economy will have an opportunity to grow as the working population of India will be high as compared to the dependant population
A 'growth window' refers to the demographic dividend: for a period the working-age population will be large relative to the dependents (young and old) that the passage discusses, giving the economy a chance to grow. The option about services booming due to government focus misreads the cause, the option claiming India will never recover adds an unsupported claim, and the option about people seeking jobs abroad is not suggested by the passage.

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