Read
the following passage carefully and answer the questions given.
It
is difficult to imaginje the extraordinary number of controls on Indian industry
before 1991. Enterpreneurs needed permission to invest and could be penalized
for exceeding production capacity. Even with the given investment capacity they
had, entering certain areas was prohibited as these were reserved for the
public sector. If they had to import anything, they required licences. To get
these licences was tough, they had to persuade a bureaucrat that the item was
required but even so permission was unvailable if somebody was already
producing it in India.
The impact of the reforms was not instantaneously and
permanently wonderful. In India’s case it began to show after about a year and
a half. After 1993 there came three years of rapid industrial growth of about
8% or so. But, in the second half of the 90s, there had an impact on the Indian
industry. But, in the last few years there has been a tremendous upturn. With
the rise of investment industrial growth has reached double digits or close.
However,
even during the period when industrial growth was not that rapid, there is a
lot of evidence that positive results of the reforms were seen. There were companies
that didn’t look at all internally but instead performed remarkably in the highly
competitive global market. For instance, the software sector’s performance was
ouotstanding in an almost totally global market. Reliance built a world class refinery.
Tatas developed an indigenously designed car. The success of the software
sector has created much higher expectations from and much higher confidence in
what Indian industry can do. On the government’s side it’s a vindication that
liberalization of both domestic and external policies, including the increased
inflow of Foreign Direct Investment, has created an environment in which industry
can do well, has done well and is preparing to do even better. What they need
is not sops, but good quality infrastructure. For the 11th plan an industrial growth
rate of around 12% is projected. It will have methods of developing infrastructure,
which will close the deficit. This can be done through increased investment in
public sector for those infrastructure areas, which cannot attract private
investment, and through efforts to improve private participation in different ways
of public private participation.
In the early stages of reforms, the
liberalization of trade policies and a shift to a market determined exchange
rate had the effect of removing constrains on agriculture in terms of depressed
prices. The removal of protection on industry helped to produce a more level
playing field, because the earlier system was extremely unfair to agriculture.
The lesson to be learnt from the reforms process is to persevere in reforming
the strategic parts of the economy, which will lead to even higher growth rate.
India has to do better than its current average growth rate of 8% and ensure
that benefits from this higher growth go beyond industry and urban areas and
extend to agriculture.
1.
Which of the following factors was responsible for the fall in India’s growth
rate in the late 1990s?
a)
The implementation of economic reforms was too rapid
b)
It was expected after achieving a high growth at 10%
c)
There was a slowdown in the global economy
d)
There were sanctions against East Asian countries by WTO
2.
Which of the following can be said about the reforms of 1991?
a)
They benefited Indian industry immediately
b)
All Indian companies began to focus on indigenous development instead
of
looking for opportunities abroad
c)
They were targeted only at the software sector
d)
They encouraged Foreign Direct Investment in India
3.
What was the impact of the flourishing Indian software sector?
a)
Other companies were unable to be competitive in the global market
b)
It fulled expectations of a good performance f rom the Indian economy
c)
Growth rate rose to 12%
d)
It created cut throat competition among software companies which would hinder
the sector in the long run
4.
Why was investment by private business disallowed in certain sectors?
a)
To ensure proper development in these sectors
b)
To prevent corruption in key sectors like infrastructure
c)
To ensure steady not inconsistent growth in key sectors
d)
To protect the interest of the public sector in these sectors
5.
What is the author’s opinion about the government’s decision to liberalise the
economy in 1991?
a)
It was beneficial because it created confidence in the Indian economy
b)
The timing was wrong since the economy experienced a slowdown in growth rate
c)
It led to a focus on software and other sectors were neglected
d)
Foreign companies took advantage of the new policies and exploited certain
sectors
6.
How did software companies deal with slow industrial growth in an open Indian
economy?
a)
They focused on strengthening their position in the domestic market
b)
They campaigned for infrastructure development
c)
They diversified into different sectors
d)
They targeted global markets
7.
What does the author recommend to ensure that the industrial sector continues
to perform better?
a)
Subsidies should be provided in infrastructure development
b)
Government should keep control of and monitor all infrastructure projects
c)
Wipe out any infrastructure deficit by transferring respnsibility of these
projects
to the private sector
d)
Ensure a combination of public and private sector involvement in developing
infrastructure
8.
How did the economic reforms affect the agriculture sector?
a)
A system of market determined exchange rate was introduced
b)
Constraints in agriculture increase
c)
Prices were depressed because there was a removal of protection on the sector
d)
Agriculture growth rate doubled
Read
the following passage carefully and answer the questions given below it. Certain
words are given in bold to help you locate them while answering some of the
questions.
Nobel
Prize winner Joseph E. Stiglitz, described “globalisation as a double edged
sword. For those willing to seize the opportunities and manage globalization on
their own terms, it has provided the basis of unprecedented growth.” Taking
full advantage of globalisation India has managed a historically unprecedented
growth rate for more than a decade and half. Following the Washington consensus
in the last quarter of 20th century, international institutions including the
World Bank and the International Monetary Fund mounted a sustained
campaign to push liberalisation of national economies and privatisation of
their public sector. Empirical studies have amply demonstrated that the
benefits of the globalization have not been shared by all the countries. Even
in the same country, the benefits arising out of globalisation have not
filtered to the various strate of the population and disparities have widened.
Thus, there are transparent inequalities amongst the countries as also within
the same country. India is no exception to the latter. In most of the poorer
countries in Africa growth rates have not registered any improvements and the
number of people below poverty line has in some cases doubled. Moreover there
is reluctance of developed countries in removing the trade distorting subsidies
in agriculture and giving duty-free market access to the least developed
countries with very limited exportable products.
The issue is how has India
reaped benefits of globalisation? To assume that economic, fiscal, trade and
allied policies initiated by the government created an environment which
facilitated economic advancement on these fronts will amount to manipulation
of ground realities. The foremost factor which engineered the growth in
India was emergence of a self-reliant middle class equipped with strong knowledge
base with technical qualifications. They pursued innovative businesses requiring
managerial and technical skills in the upcoming sectors like information technology
and other allied fields. Instead of the traditional industry led growth path followed
by the west and other developing countries India opted for services-led growth
which had visible, tangible results. In the manufacturing sector, technological
innovation, low-cost production, ability to quickly adapt to changes, establishing
word class R and D facilities etc., greatly helped in successfully meeting
global competition. The automobile industry is a classic example, Strong presence
of non-resident Indians in the developed countries occupying senior management
positions in several multinational corporations built confidence in Indian
managerial competence and leadership. This promoted MNCs’ networking with India
(as also in China) with its expanding domestic market which in the present
circumstances remained the only viable option for their sustained growth
in future. The success stories of businesses controlled by NRIs in the western
markets established India’s reputation as dependable and disciplined
businessmen. Well established democratic political framework, large young
population ingrained with absorption capaicty of new technologies have all
created a responsive realization that India is marching ahead. The initiative
largely of its private sector in expanding connectivity by improved
telecommunications, low-cost air transportation and vast press, TV and other
media penetration ignited awareness amongst all sections of its people of a
bright future and thus radically changed their perception, thinking and actions.
Furthermore the entire world took note of unexploited potentials of India in becoming
a competitive centre of excellence and cost efficiency.
9.
According to the author, which of the following was primarily responsible for
India’s growth?
a)
Well developed and implemented economic, fiscal and trade policies
b)
Detailed microlevel analysis of the economy
c)
A workforce with managerial rather than technical qualification
d)
None of these
10.
What was the fallout of improvement in connectivity?
a)
Decline in travel by traditional modes like road and rail
b)
Optimism was created among the Indian public about the future of the Indian
economy
c)
Youth in urban areas m ainly benefited from the exposure to western
styles
of management and business.
d)
It made Indian entrepreneurs realise that they should concentrate on domestic
not global markets.
11.
What does the example of the auto industry indicate?
a)
Indian cars were too expensive for the Indian market but were competitively
priced for global markets.
b)
Investment by multinationals in Indian firms boosted the Indian auto industry.
c)
Collaboration with foreign scientists reduced time needed for research and
development
d)
NRIs were responsible for the success of the automobile industry
12.
Choose the word which is most nearly the same in meaning as the word given in
bold as used in the passage.
Mounted
a)
Increased b) Grew c) Organized
d)
Climbed
13.
Choose the word which is most nearly the same in meaning as the word given in
bold as used in the passage.
Tangible
a)
Valuable b) Complex c) Touch
d)
Concrete
14.
Choose the word which is most nearly the same in meaning as the word given in
bold as used in the passage.
Manipulation
a)
Distortion b) Calculation c) Utilisation
d)
Indication
15.
Choose the word which is most opposite in meaning of the word given in bold as
used in the passage.
Viable
a)
Indirect b) Impractical c) Unsatisfied
d)
Unpleasant
16.
Choose the word which is most opposite in meaning of the word given in bold as
used in the passage.
Amply
a)
Slowly b) Intensively c) Least
d)
Hardly
ANSWERS:
1.
Option C
2.
Option D
3.
Option B
4.
Option D
5.
Option A
6.
Option D
7.
Option D
8.
Option A
9.
Option D
10.
Option B
11.
Option D
12.
Option C
13.
Option D
14.
Option A
15.
Option B
16.
Option C
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