State whether the following statements are true/false, with valid arguments : (a) Economic participation of women as homemakers is not accounted for in the Gross Domestic Product. (b) Indian economy has shown excellent shift from informal sector to formal sector in the recent past.

Question

Accepted Answer

(a) True. Economic participation of women as homemakers is not accounted for in GDP.

Reasons:
1. Homemaking is unpaid work
2. No market transaction involved
3. Not recorded in national accounts
4. Difficult to measure value
5. Falls outside economic definition of production

This reflects the limitation of GDP as a measure of economic welfare.

(b) True. Indian economy has shown satisfactory progress towards formalization.

Reasons:
1. Growth in regular salaried employment
2. Expansion of social security coverage
3. Implementation of labor reforms
4. Digital payment systems promoting formal transactions
5. Government schemes for formalization of economy

However, progress is slow as 94% workforce still remains in informal sector.