Directions: Read the following passage and answer the questions that follows.
As the government prepares to empty its failing candidates and heads for the hot and dusty plains to solicit votes, it is visibly exuding optimism about the economy. According to its non-elected representatives, all the lead indicators seem to be showing signs of a revival with the first glimmer of some incipient growth pushing through the enveloping groom. Steel, cement, auto, fast-moving consumer goods (such as soaps and detergents), food items, beverages, volume of goods moved by the railways have all shown some improvement in January after having shrunk in the previous two months.
But before we start congratulating the government for its excellent economic management, let’s hit the pause button for a moment. How much of the Indian economy’s resilience is owned to governmental intervention? OK, is there a strategy at all?
One of the economy’s mainstays for over a decade has been services. This contributes to over 50% of the country’s GDP and has been providing enormous growth impulse over the past few years. If you were to listen to the government representatives, it would seem as if they had foreseen the coming age of services and had designed that structure.
The truth is somewhat different. There are many reasons behind the extraordinary growth of services. One of the reasons is the kind of elaborate rent-seeking structures erected by the government in the manufacturing sector. Any person waiting to set up a manufacturing facility in India still has to fill a large number of outstretched palms, making the operations costly from day one.
Here’s another unique aspect of the economy for which politicians routinely take credit. One of the saving graces for the Indian economy during this episode of the of the downturn is the safety net expected to be provided by Indian consumers, even as the international economy winds down and eschews consumption of goods made in India.
This has had a deleterious impact on Indian exports, leading many exporters to scale down their operations and restructure their businesses. Fortunately, for the planners and the administrators, the impact of the global slowdown is likely to be cushioned, to a large extent, by the gigantic Indian domestic market, which will continue consuming and providing the growth push to the economy. Again, it’s morning and presciently decreed that henceforth the country would focus only on the domestic markets. The government has always felt that exports should be the apposite strategy for economic growth, just like some of the other emerging countries.
Guess what? Exporters also have to manufacture and that is quite an endurance test in India. Plus, the intricate structure built around promoting exports also worked as a huge deterrent. The government also did not quite see exports as a alternative, viable economic growth model till the Southeast Asian success story burst on to the scene. Hence, till then exports did not quiet get the required push. So, no grand design here too.
Unlike in the USA and various other European economies, where the government provides unemployment benefits as part of their social contract, Indians have to fend for themselves. In the current downturn, for example, many Indians —– especially in the urban and semi-urban settlements— are wary of spending because of uncertainties surrounding their jobs. This has impacted consumption but, conversely, is bound to improve their lot at all times. This collective strength has not been forged by some steely policy push, but has developed by default, almost in line with Charles Darwin’s theory of survival.
- According to the author, one of the reasons behind services flourishing in our country is:
A) financial support provided by the government
B) funding by the people
C) availability of a pool of experts from developed countries in this sector
D) availability of young working population
E) Other than those given as options
- Which of the following is most nearly the opposite in meaning of the word “EXUDING” as used in the passage?
- Which of the following is most nearly the same in meaning of the word “APPOSITE” as used in the passage?
- According to the author, one of the reasons why India’s economy managed to sail through the economic downturn was:
1) that there was demand for Indian goods from domestic consumers even when internationally it was declined
2) that the population had foreseen the trouble and could prepare the country to efficiently deal with it.
3) that it was least affected by the economic downturn.
A) Only (2)
B) Only (3)
C) Both (1) and (2)
D) Only (1)
E) Both (1) and (3)
- Which of the following is the central theme of the passage?
A) Social contract- A must in every country
B) Hurdles created by the government for the common man
C) Government’s campaign to once again regain confidence of the masses
D) Economic Growth – A result of natural forces rather than the government
E) Service Industry – The backbone of every economy across the Globe
- The author attributes the improvement (or maintenance) of the economic condition of the country to
1) the government, as it could foresee a dwindle in the economy and could take suitable measures to tackle it.
2) appropriate policies to push people to spend more.
3) the economy for it is surviving on its own either through consumption or saving,
A) Only (1)
B) Only (3)
C) Both (1) and (2)
D) Only (1)
E) Both (1) and (3)
- Which of the following is the most nearly the Same in meaning as the word ‘ESCHEWS’ as used in the passage?
- Which of the following is most nearly the opposite in meaning of the word ‘DELETERIOUS’ as used in the passage?
- Which of the following correctly explains the phrase ‘wary of’ as used in the passage regarding spending behavior of citizens?
C) upset about
D) cautious about
E) fearless in
- Which of the following is NOT TRUE in the context of the passage?
A) Traditionally the Government did not believe exports to be providing a boost to the economy.
B) Most unemployed Indians todays reap the benefits provided under social contracts.
C) The author is a firm believer of the fact that the supporting the economy of the country.
D) The Government is portraying a rosy picture of the economy to gain people’s confidence.
E) All the given statement are true.