Which of the following has/have occurred in India after its liberalization of economic policies in 1991? 1. Share of agriculture in GDP increased enormously. 2. Share of India's exports in world trade increased. 3. FDI inflows increased. 4. India's foreign exchange reserves increased enormously. Select the correct answer using the codes given below:

The correct answer is B. Statements 2, 3 and 4 hold; statement 1 does not.

Statement 1 is wrong. Agriculture's share in GDP fell steadily after 1991, from roughly 30 per cent to around 15-17 per cent in the late 2010s. Farm output rose in absolute terms, but services and industry grew faster, so the share shrank.

Statement 2 is right. India's share of world merchandise and services exports rose from well under 1 per cent in 1991 to nearly 2 per cent by 2017, helped by a more open trade regime.

Statement 3 is right. FDI inflows rose sharply after the reforms, aided by opening many sectors under the automatic route. The annual figures have fluctuated, but the trend is clearly upward.

Statement 4 is right. Forex reserves were about 1 billion dollars at the 1991 crisis, barely covering a few weeks of imports. They reached around 400 billion dollars by 2017 and have since crossed 600 billion dollars.

The core concept here is the 1991 balance-of-payments crisis and the reform package that followed. It links directly to the Indian Economy section on liberalisation, and to Mains questions on whether reforms helped agriculture and rural incomes.

Trap: reading "agriculture output grew" as "agriculture's share in GDP grew", which is the reason aspirants pick option D.