Employment, Agriculture & Economic Reforms — Practice

Question 1

What does PLFS stand for, and since which year has it run?

Accepted Answer

Periodic Labour Force Survey, running annually since 2017-18.

Question 2

What was India's unemployment rate in 2023-24, per PLFS?

Accepted Answer

3.2%, unchanged from 2022-23.

Question 3

Expand 'LPG' as used for the 1991 reforms.

Accepted Answer

Liberalisation, Privatisation, Globalisation.

Question 4

Why might a farmer growing an MSP-covered crop still not benefit from the announced MSP?

Accepted Answer

Because MSP's real benefit depends on actual government procurement reaching that farmer's region — a farmer outside the effective procurement network may still sell at prevailing market prices regardless of the MSP announcement.

Question 5

Distinguish FDI from FPI, and state which is generally considered more stable.

Accepted Answer

FDI involves a lasting management interest and operational control in an enterprise; FPI is a purely financial stake in securities with no operational control. FDI is generally more stable; FPI is more prone to sudden reversal ('hot money').

Question 6

How do PLI schemes differ in design logic from older blanket tariff-protection industrial policy?

Accepted Answer

PLI ties the incentive directly to incremental production or sales actually achieved in a targeted sector, rather than providing blanket protection regardless of output — avoiding rewarding firms that never scale up.

Question 7

What was the immediate macroeconomic trigger for the 1991 reforms, and name one concrete action taken under each of the three LPG strands.

Accepted Answer

A balance-of-payments crisis (forex reserves down to a few weeks' import cover). Liberalisation: abolition of industrial licensing for most sectors. Privatisation: start of disinvestment in public-sector enterprises. Globalisation: rupee devaluation and liberalised foreign investment rules.

Question 8

PLFS 2023-24 shows LFPR and WPR rising while unemployment stays flat at 3.2%. Explain why this combination requires a nuanced rather than simply positive reading.

Accepted Answer

More people are participating in the labour force and finding work, but a flat unemployment rate alongside strongly rising participation suggests much of the new work may be self-employment or unpaid family labour (lower job quality) rather than salaried formal-sector employment — so 'more people working' and 'job-quality concerns persist' can both be true simultaneously.

Practice — Employment, Agriculture & Economic Reforms

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