Discussion
In India, rural incomes are generally lower than the urban incomes, which of the following reasons account for this? I=A large number of farmers are illiterate and know little about scientific agricultureII=Prices of primary products are lower than those of manufactured products III=Investment in agriculture has been low when compared to investment in industry
Answer: A
All three reasons apply.
Illiteracy limits the adoption of improved practice; the terms of trade have long run against primary products and in favour of manufactures; and public and private investment per worker in agriculture has been far below that in industry. Together they hold rural productivity, and therefore rural incomes, down.
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