Read the following passage and answer the items that follow. Your answers to these items should be based on the passage only. 

Economic liberalization in India was shaped largely by the economic problems of the government than by the economic priorities of the people or by the long-term development objectives. Thus, there were limitations in conception and design which have been subsequently validated by experience. Jobless growth, persistent poverty and rising inequality have mounted as problems since economic liberalization began. And all these years later, four quiet crises confront the economy; agriculture, infrastructure, industrialization and education as constraints on the country's future prospects. These problems must be resolved if economic growth has to be sustained and transformed into meaningful development. 

Which of the following is/are the most rational and logical inference/ inferences that can be made from the passage? 

1. It is essential to rethink and redefine the economic role of the State in the quest for development. 

2. India has not made effective implementation of its policies in social sectors nor made sufficient investments in them. 

Select the correct answer using the code given below. 

The correct answer is Both 1 and 2.

Key Points

• Let's look at the flow of the passage to understand all its implications properly:
  • First, the passage talks about how the economic liberalization or easing in India was not a result of priorities or choices or objectives of long-term development but that of problems or issues
  • Then it states that due to having the wrong reasons, the liberalization, as also confirmed by the author's own experiences, had structural and conceptual flaws
  • The author then goes on to specifically state the results of those flaws, i.e., jobless growth, persistent poverty, rising inequality
  • The author further describes the already present long-term impacts of the above results, i.e., constrained agriculture, infrastructure, industrialization and education
  • Finally, the author suggests that the above issues must be resolved for sustained and transformational economic developmental growth
• Let's look at each of the options:
  • 'It is essential to rethink and redefine the economic role of the State in the quest for development': 
    • The first two parts of the passage states that due to the wrong reasons behind economic liberalization, it developed various flaws
    • Thus, to get rid of these flaws, it is clear that a rethinking and redefinition of the economic role of the State is needed
    • Also, in the concluding line, we see that for economic growth as meaningful development, the problems that have arisen because of the above issues must be resolved
    • This further emphasizes the statement a revamping of the economic role of the State will do the needful
    • Thus we can reasonably conclude that this is a logical inference
  • 'India has not made effective implementation of its policies in social sectors nor made sufficient investments in them'
    • ​The passage says that the very design of the economic policies was flawed as the latter was built on the wrong reasons
    • As stated in the passage, 'Jobless growth, persistent poverty and rising inequality have mounted as problems since economic liberalization began'
    • This is a clear indication of not enough investment or policy implementation in the social sector.  
    • Hence this can be a reasonable inference.