IBPS PO Mains 2016 - English Language

1.		Directions (Q. 1-5) : Read the following passage carefully and answer the questions given below it. The finance ministry on Monday said the Union budget would be growth-oriented, implicitly signaling that it will address the investment crisis in the Indian economy. “Given the fiscal constraints and other parameters under which the government has to function, the effort of the government is to present a budget which is growth-oriented, that maintains the momentum of growth and tries to develop on it,” economic affairs secretary Shaktikanta Das said in an interview with DD News uploaded on YouTube on Monday. According to Das, the budget will also detail new measures to support ongoing programmes such as Start-up India, Standup India, Make In India, Digital India and the Skill mission – all of which have a strong focus on creating jobs. Finance minister Arun Jaitley will be presenting his third budget on 29 February at a time when private investment has dried up and the exchequer has had to incur higher expenditure due to implementation of the One Rank One Pension scheme for the armed forces and the recommendations of the Seventh Pay Commission. That may cramp the government’s ability to accelerate public investment to revive economic growth while sticking within the confines of its fiscal deficit targets. Some parts of the government believe that the emphasis should be on growth and not fiscal consolidation. Other parts, and the Reserve Bank of India, believe the finance minister should adhere to his fiscal commitments made in the last budget. Without revealing whether the government will digress from the path of fiscal consolidation, Das said the government’s priority is to take a balanced view on “the expenditure requirement to keep our growth momentum and to what extent we can borrow’. Care Ratings chief economist MadanSabnavis said the government has to increase its allocation for public investment on infrastructure to stimulate growth. “I expect government to spend Rs.10,000-20,000 crore additional amount on infrastructure. Given nominal GDP (gross domestic product) is not expected to expand significantly, the leeway for the government to spend more may not be there while keeping fiscal deficit within 3.7-3.9% of GDP. So I don’t expect a big-bang push for infrastructure spending given the fiscal constraint,” he said. The finance ministry revealed more contours of its budget when minister of state for finance JayantSinha, also in an interview to DD News, said the four pillars of the budget will be poverty eradication, farmers’ prosperity, job creation and a better quality of life for all Indian citizens. ‘This budget will be a forward looking budget that will ensure that India will continue to be a haven of stability and growth in a very turbulent and choppy global economic environment,” he added. The government has been contemplating tax incentives to companies in the manufacturing sector, including tax deductions on emoluments paid to new employees, to encourage firms to step up hiring and create jobs under its Make in India initiative. The government published suggestions that it has received internally from various government departments and other stakeholders on the mygov.in website, seeking further ideas and comments from the public. Suggestions being considered by the government include financial incentives, tax incentives under the Income Tax Act, 1961, and subsidies for equipping employees with job skills, and upgrading and improving employment exchanges. Another suggestion is to expand the scope of the tax deduction currently available to companies that add at least 10% to their workforce in a year by lowering the threshold. This incentive is available only in cases of employees who earn less than Rs.6 lakh a year. (The topic of the Passage asked in the exam was based on Infrastructure Investment) What is the main objective of the government to create the Union Budget?

Directions (Q. 1-5) : Read the following passage carefully and answer the questions given below it.

The finance ministry on Monday said the Union budget would be growth-oriented, implicitly signaling that it will address the investment crisis in the Indian economy.

“Given the fiscal constraints and other parameters under which the government has to function, the effort of the government is to present a budget which is growth-oriented, that maintains the momentum of growth and tries to develop on it,” economic affairs secretary Shaktikanta Das said in an interview with DD News uploaded on YouTube on Monday.

According to Das, the budget will also detail new measures to support ongoing programmes such as Start-up India, Standup India, Make In India, Digital India and the Skill mission – all of which have a strong focus on creating jobs.

Finance minister Arun Jaitley will be presenting his third budget on 29 February at a time when private investment has dried up and the exchequer has had to incur higher expenditure due to implementation of the One Rank One Pension scheme for the armed forces and the recommendations of the Seventh Pay Commission.

That may cramp the government’s ability to accelerate public investment to revive economic growth while sticking within the confines of its fiscal deficit targets. Some parts of the government believe that the emphasis should be on growth and not fiscal consolidation. Other parts, and the Reserve Bank of India, believe the finance minister should adhere to his fiscal commitments made in the last budget.

Without revealing whether the government will digress from the path of fiscal consolidation, Das said the government’s priority is to take a balanced view on “the expenditure requirement to keep our growth momentum and to what extent we can borrow’. Care Ratings chief economist MadanSabnavis said the government has to increase its allocation for public investment on infrastructure to stimulate growth. “I expect government to spend Rs.10,000-20,000 crore additional amount on infrastructure. Given nominal GDP (gross domestic product) is not expected to expand significantly, the leeway for the government to spend more may not be there while keeping fiscal deficit within 3.7-3.9% of GDP. So I don’t expect a big-bang push for infrastructure spending given the fiscal constraint,” he said.

The finance ministry revealed more contours of its budget when minister of state for finance JayantSinha, also in an interview to DD News, said the four pillars of the budget will be poverty eradication, farmers’ prosperity, job creation and a better quality of life for all Indian citizens. ‘This budget will be a forward looking budget that will ensure that India will continue to be a haven of stability and growth in a very turbulent and choppy global economic environment,” he added.

The government has been contemplating tax incentives to companies in the manufacturing sector, including tax deductions on emoluments paid to new employees, to encourage firms to step up hiring and create jobs under its Make in India initiative. The government published suggestions that it has received internally from various government departments and other stakeholders on the mygov.in website, seeking further ideas and comments from the public.

Suggestions being considered by the government include financial incentives, tax incentives under the Income Tax Act, 1961, and subsidies for equipping employees with job skills, and upgrading and improving employment exchanges. Another suggestion is to expand the scope of the tax deduction currently available to companies that add at least 10% to their workforce in a year by lowering the threshold. This incentive is available only in cases of employees who earn less than Rs.6 lakh a year.

(The topic of the Passage asked in the exam was based on Infrastructure Investment)

What is the main objective of the government to create the Union Budget?

It should meet the requirements of the society.

It should be under some fiscal constraints.

It should be growth oriented.

It should meet the requirements of a developed country.

It should change the momentum of growth.

2.		What is/are the primary reasons behind the current economic slowdown? (A) Slow rate of capital expansion (B) Tardy investment in infrastructure as well as plant and machinery (C) A rapid increase in the cases of corruption, and decreased FDI

What is/are the primary reasons behind the current economic slowdown?

(A) Slow rate of capital expansion

(B) Tardy investment in infrastructure as well as plant and machinery

Only (A)

Both (A) and (B)

Either (A) or (B)

Both (B) and (C)

All (A), (B) and (C)

3.		Please select the most appropriate option, out of the five options given for each of the following sentences, which, in your view, should be grammatically and structurally correct. Please note that the meaning & context of the sentence must not change.

The judges finally distributed the awards among the most active children talking at length among themselves.

The judges finally distributed the awards talking at length among themselves.

The judges, talking at length among themselves finally distributed the awards among the most active children.

The judges distributed finally talking at length among themselves the awards among the most active children.

None is true.

4.		Food inflation is touching twenty per cent. The government will have to tighten monetary policy to prevent further rise. (A) Although food inflation is ……… (B) With the tightening of monetary ………. (C) Given that food inflation ……….

Food inflation is touching twenty per cent. The government will have to tighten monetary policy to prevent further rise.

(A) Although food inflation is ………

(B) With the tightening of monetary ……….

Only (A)

Only (B)

Only (C)

Only (A) and (B)

None of these

5.		Why is the government providing tax incentive to companies in manufacturing sector?

For better infrastructure.

For tax deductions on emoluments paid to new employees,

To create new job opportunities and to initiate project ‘Make in India’

to create new job opportunities and to initiate project Standup India.

to encourage firms to step up hiring new skilled employees

6.		CORPULENT

Lean

Gaunt

Emaciated

Obese

Nobble

7.		However, it is possible that the non -resident entity may have a business connection with the resident Indian entity. In such a case, the resident Indian entity could be treated as Permanent Establishment of the nonresident entity.……………During the last decade or so, India has seen a steady growth of outsourcing of business processes by non residents or foreign companies to IT -enabled entities in India. Such entities are either branches or associated enterprises of the foreign enterprise or an independent India enterprise. The nonresident entity or foreign company will be liable to tax in India only if the IT -enabled BPO unit in India constitutes its Permanent Establishment.

The tax treatment of the Permanent Establishment in such a case is under consideration

How would the profit would be shared is not decided yet?

A lengthy and cumber some process requiring a lot of application of mind and revenue principles is ahead for the tax department of India

A new trend is seen in last decade.

Indian companies have a lot on stake as competition increases.

8.		Directions (Q. 6-10): Read the following passage carefully and answer the questions given below it. The alarm bells should start ringing any time now. An important component of the economy has been sinking and needs to be rescued urgently. This critical piece is 'savings' and, within this overall head, household savings is the one critical subcomponent that needs close watching and nurturing. While it is true that one of the primary reasons behind the current economic slowdown is the tardy rate of capital expansion - or, investment in infrastructure as well as plant and machinery - all attempts to stimulate investment activity are likely to come to naught if savings do not grow. Without any growth in the savings rate, it is futile to think of any spurt in investment and, consequently, in the overall economic growth. If we source all the investment funding from overseas, it might be plausible to contemplate investment growth without any corresponding rise in savings rate. But that is unlikely to happen. Within the overall savings universe, the subcomponent 'household savings' is most critical. It provides the bulk of savings in the economy, with private corporate savings and government saving contributing the balance. The worrying factor is the near-stagnation in household savings over the last eight years or so. What's even more disconcerting is the fact that household savings remained almost flat during the go-go years of 2004-08. This seems to be counter-factual. There are many studies that show that there is a direct relationship between overall economic growth and household savings. So, at a time when India's GDP was growing by over 9% every year, the household savings rate stayed almost constant at close to 23% of GDP. There was, of course, an increase in absolute terms, but it remained somewhat fixed as a proportion of GDP. What is responsible for this contradictory movement? The sub-group on household savings, formed by the working group on savings for the 12th Plan set up by the Planning Commission and chaired by RBI deputy governor SubirGokarn, has this to say, "...a recent study had attributed the decline in the household saving ratio in the UK during 1995-2007 to a host of factors such as declining real interest rates, looser credit conditions, increase in asset prices and greater macroeconomic stability... While recognising that one of the key differences in the evolving household saving scenario between the UK and India is the impact of demographics (dependency ratio), anecdotal evidence on increasing consumerism and the entrenchment of (urban) lifestyles in India, apart from the easier availability of credit and improvement in overall macroeconomic conditions, is perhaps indicative of some 'drag' on household saving over the last few years as well as going forward." India has another facet: a penchant for physical assets (such as bullion or land). After the monsoon failure of 2009, and the attendant rise in price levels that has now become somewhat deeply entrenched, Indians have been stocking up on gold. Consequently, savings in financial instruments dropped while those in physical assets shot up. This is also disquieting for policy planners because savings in physical assets stay locked in and are unavailable to the economy for investment activity. There is a counter view that higher economic growth does not necessarily lead to higher savings. According to a paper published by Ramesh Jangili (Reserve Bank of India Occasional Papers, Summer 2011), while economic growth doesn't inevitably lead to higher savings, the reciprocal causality does hold true. "It is empirically evident that the direction of causality is from saving and investment to economic growth collectively as well as individually and there is no causality from economic growth to saving and (or) investment." Whichever camp you belong to, it is beyond doubt that savings growth is a necessary precondition for promoting economic growth. The Planning Commission estimates that an investment of $1 trillion, or over 50 lakh crore, will be required for the infrastructure sector alone. And, a large part of this critical investment will have to be made from domestic savings. (The topic of the Passage asked in the exam was based on Informal Economy to formal Economy) What is the main concern of the author behind saying that ‘the alarm bells should start ringing anytime now’?

Directions (Q. 6-10): Read the following passage carefully and answer the questions given below it.

The alarm bells should start ringing any time now. An important component of the economy has been sinking and needs to be rescued urgently. This critical piece is 'savings' and, within this overall head, household savings is the one critical subcomponent that needs close watching and nurturing.

While it is true that one of the primary reasons behind the current economic slowdown is the tardy rate of capital expansion - or, investment in infrastructure as well as plant and machinery - all attempts to stimulate investment activity are likely to come to naught if savings do not grow. Without any growth in the savings rate, it is futile to think of any spurt in investment and, consequently, in the overall economic growth. If we source all the investment funding from overseas, it might be plausible to contemplate investment growth without any corresponding rise in savings rate. But that is unlikely to happen.

Within the overall savings universe, the subcomponent 'household savings' is most critical. It provides the bulk of savings in the economy, with private corporate savings and government saving contributing the balance. The worrying factor is the near-stagnation in household savings over the last eight years or so. What's even more disconcerting is the fact that household savings remained almost flat during the go-go years of 2004-08.

This seems to be counter-factual. There are many studies that show that there is a direct relationship between overall economic growth and household savings. So, at a time when India's GDP was growing by over 9% every year, the household savings rate stayed almost constant at close to 23% of GDP. There was, of course, an increase in absolute terms, but it remained somewhat fixed as a proportion of GDP.

What is responsible for this contradictory movement? The sub-group on household savings, formed by the working group on savings for the 12th Plan set up by the Planning Commission and chaired by RBI deputy governor SubirGokarn, has this to say, "...a recent study had attributed the decline in the household saving ratio in the UK during 1995-2007 to a host of factors such as declining real interest rates, looser credit conditions, increase in asset prices and greater macroeconomic stability...

While recognising that one of the key differences in the evolving household saving scenario between the UK and India is the impact of demographics (dependency ratio), anecdotal evidence on increasing consumerism and the entrenchment of (urban) lifestyles in India, apart from the easier availability of credit and improvement in overall macroeconomic conditions, is perhaps indicative of some 'drag' on household saving over the last few years as well as going forward." India has another facet: a penchant for physical assets (such as bullion or land). After the monsoon failure of 2009, and the attendant rise in price levels that has now become somewhat deeply entrenched, Indians have been stocking up on gold. Consequently, savings in financial instruments dropped while those in physical assets shot up. This is also disquieting for policy planners because savings in physical assets stay locked in and are unavailable to the economy for investment activity. There is a counter view that higher economic growth does not necessarily lead to higher savings. According to a paper published by Ramesh Jangili (Reserve Bank of India Occasional Papers, Summer 2011), while economic growth doesn't inevitably lead to higher savings, the reciprocal causality does hold true. "It is empirically evident that the direction of causality is from saving and investment to economic growth collectively as well as individually and there is no causality from economic growth to saving and (or) investment."

Whichever camp you belong to, it is beyond doubt that savings growth is a necessary precondition for promoting economic growth. The Planning Commission estimates that an investment of $1 trillion, or over 50 lakh crore, will be required for the infrastructure sector alone. And, a large part of this critical investment will have to be made from domestic savings.

(The topic of the Passage asked in the exam was based on Informal Economy to formal Economy)

What is the main concern of the author behind saying that ‘the alarm bells should start ringing anytime now’?

The current economic growth is slowing down due to regular failure of monsoon.

Due to power shortage industrial growth could not touch the target.

Household savings are sinking and they require to be revamped.

Due to a sharp decline in real interest rates people have lost their enthusiasm to invest in govt schemes.

All the above

9.		Five statements are given below, labelled a, b, c, d and e. Among these, four statements are in logical order and form a coherent paragraph/passage. From the given options, choose the option that does not fit into the theme of the passage.

India has 13 of the 20 most polluted cities in the world, according to the World Health Organization.

The government should redouble its efforts to combat climate change, which will naturally slash not just greenhouse-gas emissions but particulates as well.

Every year, more than half a million people are estimated to die prematurely because of air pollution.

While air quality tends to worsen around this time of year as millions of Indians light firecrackers to celebrate the Diwali festival, the problem isn’t limited by season or geography.

This week, air pollution in New Delhi has been truly off the charts: Tiny particulates, which are especially deadly, topped 999 micrograms per cubic meter—40 times what is considered safe and beyond what the scale was designed to measure.

10.		After two years, high inflation moderated in the later part of 2011-12 in response to past monetary tightening and growth deceleration. High inflation had adverse consequences on welfare and on saving and investment, particularly household saving in financial assets. The most serious consequence of inflation is____ As growth slowed down, in part due to high inflation, it further reduced the welfare of the common man through adverse impact on employment and incomes.

its destructive allocation impact on the industries that were lately coming up.

its negative impact on the rich and high-profile people.

its adverse distributional impact on the poor, people without social security and pensioners.

its wayward consequences on the public distribution system meant for the poor.

its unfavourable bearing on day to day commodities that are used by the common man.

Worried about Placements?

Get on FAST TRACK COURSE

IBPS PO Mains 2016 - English Language