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UPSC 1995: 93. The main reason for low growth rate in India, in spite of high rate of savings and capital formation is
(a)high birth rate
(b)low level of foreign aid
(c)low capital / output ratio
(d)high capital / output ratio
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Not attemptedCorrect Answer: (d) high capital / output ratio
Although India’s savings and capital formation rates were relatively high, much more capital was needed to generate an additional unit of output because the incremental capital-output ratio (ICOR) was high. This capital inefficiency—option (d) high capital/output ratio—kept the overall growth rate low despite investment. Other options (high birth rate, low aid, low ICOR) either affect population pressure or are factually opposite. ([licchavilyceum.com](https://licchavilyceum.com/upsc-civil-services-prelims-1995-solved-question-paper/?utm_source=openai))
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Frequently Asked Questions
What is the correct answer to this UPSC 1995 Indian Economy question?▼
The correct answer is option (d): high capital / output ratio. Watch the detailed video explanation in our Sherlocking Prelims course on UnlockIAS.
Which year was this National Income & Economic Growth question asked in UPSC Prelims?▼
This question was asked in UPSC CSE Prelims 1995, GS Paper 1, as Question 93. It falls under Indian Economy > National Income & Economic Growth.
What is the difficulty level of this UPSC question?▼
This question is rated "easy". It tests basic recall and most well-prepared aspirants should answer it correctly.
How many UPSC Prelims questions have been asked from National Income & Economic Growth?▼
UPSC has asked 37 questions from National Income & Economic Growth (under Indian Economy) across multiple years. Visit the topic page to see the full list and year-wise trends.