Direction.
DIRECTIONS (Qs. 106-110) : 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 nearstagnation in household savings over the last eight years or so. Whats 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 Indias 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 doesnt 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.
Only (A)
Both (A) and (B)
Either (A) or (C)
Both (B) and (C)
B. Both (A) and (B)
Paytm
Mobikwik
Freecharge
Oxigen
If only course of action I follows
If only course of action II follows
If either course of action I or II follows.
If neither course of action I nor II follows.
Misappropriate
Balance
Remunerate
Clear
12
8
10
7
Tihane-2
SunwayTaihu Light
Watson
Shasra-T
Lean
Gaunt
Emaciated
Obese
F2
F4
F6
F9
Glutton
Postulant
Shrink
Pluck
simpler, running in
faster, voting through
easier, running for
fool proof, voting on
Interface Delay Device
Interface Traffic Manager
Interface Routing Processor
Interface Message Processor
66,240
72,100
62,200
65,800
Conducive
Discern
Tantamount
Defined
Facilitating import of goods
Remittance facility
Safe custody of articles
Foreign Exchange
Only (A)
Only (A) and (B)
All (A), (B) and (C)
Only (B) and (C)
Two
Three
Four
Can't be determined
To expand the scope of tax deduction to companies that add at least 10% to their workforce in a year.
To upgrade and improve employment exchange.
To provide incentive to employees who earn less than Rs.6 lakh a year.
Tax penalty for high income people.
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.
B
D
H
F
Varun Singh Bhati
Deepa Malik
Amit Kumar Saroha
Devendra Jhajaria
D - Monday
C - Tuesday
A - Friday
E - Wednesday
6 km/hr
3 km/h
2 km/hr
4 km/hr
19 minutes
20 minutes
18 minutes
21 minutes
motley, an enhancement
hybrid, a combination
nasal, a blend
mangled, a medley.
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.
if x >= y
if x > y
if x < y
if x <= y
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.
Memory
Address Bus
Accumulator
Control Unit
100%
200%
75%
85%
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.
That new budget will make India stable forever.
The four pillars of budget will lead to make stability.
India will continue towards stability even in disturbed economic environment.
The budget will remain unchanged even in turbulent and choppy economic environment.