Q. Consider the following statements:
1.The Indian government’s “Make in India” initiative aims to attract foreign enterprises by improving the Ease of Doing Business index rankings and offering schemes like the Production Linked Incentive (PLI).
2.The ‘’Lewis two-sector model’’ suggests that for a country to specialize in a specific export, it must have a lower opportunity cost to produce the good than other nations.
Which of the statement(s) given above is/are correct?
Explanation –
Statement 1 is correct. The “Make in India” initiative is designed to attract foreign investments and enhance India’s manufacturing sector. It includes improving the Ease of Doing Business to attract foreign enterprises and offering schemes like the Production Linked Incentive (PLI) to boost domestic manufacturing and exports.
Statement 2 is incorrect. The Lewis two-sector model suggests that workers from the agricultural sector, who are often underproductive, should transition to the modern or manufacturing sector, where there is greater scope for productive work. Whereas, the Ricardian theory of comparative advantage states that for a country to specialize in a specific export, it must have a lower opportunity cost to produce the good than other nations.
Source: The Hindu
