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.
What was/were the reason(s) of drop in savings in financial instruments after 2009?
Rise in price level of gold
Decrease in real interest rates on savings in financial instruments
Investment in physical assets, particularly land
Only (a) and (c)
Correct Answer :
C. Investment in physical assets, particularly land
It is mentioned in the passage that, '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.' Threrefore option (c) is correct.
Related Questions
Who amongst the following lives exactly between H and the one who owns Lenovo Laptop?
B, C
G, D
F, G
E, A
For the buying and selling of precious metals such as Gold and Silver, the market established is termed as ________ .
Capital Market
Money Market
Bullion Market
wholesale cash market
The high-security banknote production facility which is credited with the design of the Rs 2000 banknote has been set up at _____________ .
Nasik
Dewas
Mysuru
Noida
The rate of inflation increases when the purchasing power of money___________ .
Decreases
Increases
Stable
Decrease just half
Please select the most appropriate option
If you try to understand the concept in the class you will not only remember it but also will not be able to put to use while solving even the difficult exercises.
If you tried to understand the concept of the whole class, you will not only remember it, but also can put to use while solving even the difficult exercises.
If you tried to understand the concept in the class, you would not only remember it but also can put it to use while solving even the difficult exercises.
If you tried to understand the concept in the class, you would not only remember it but also could put it to use while solving even the difficult exercises.
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 isnt limited by season or geography.
Which of the following is true with respect to the given information ?
Mary Kom sits exactly between Abhinav Bindra and Dipa Karmakar
Sania Mirza faces immediate neighbour of Abhinav Bindra
Sathish is an immediate neighbour of Mary Kom
P.V.Sindhu faces Vacant seat
The National Green Tribunal (NGT) in December 2016 imposed a ban on the procurement, sale and use of glass powder coated 'manja' for flying kites. Who is the Chairman of NGT?
Lokeshwar Singh Panta
Jagdish Singh Khehar
Dinesh Saxena
Swatanter Kumar
There is a network that can connect networks ranging from small location or area to a bigger range including public packet network and large corporate networks. That network's enterprise allows users to share access to applications, services and other centrally located resources. Its ability for a huge geographical access has transformed networking. Which among the following is that network?
SAN
CAN
LAN
WAN
4x + 2y =8.5, 2x + 4y = 9.5
x > y
x < y
x >= y
x <= y
8 litres are drawn from a flask containing milk and then filled with water. The operation is performed 3 more times. The ratio of the quantity of milk left and total solution is 81/625. How much milk the flask initially holds?
10 ltr
20 ltr
30 ltr
40 ltr
Out of 6 green ball, 4 blue ball, in how many ways we select one or more balls ?
42
34
31
22
6 13 20 65 256 ?
1283
1756
2786
2686
Which of the following is not a primary function of a bank?
Facilitating import of goods
Remittance facility
Safe custody of articles
Foreign Exchange
The Mumbai Stock Exchange was set up in ____________.
1880
1930
1847
1875
Please select the most appropriate option
Although I already knew the answer and he invited me to visit him often, since I just have seen her in the square, I was never determined to yield this point.
Although I have already known the answer and he invited me to visit him often but since I just have seen her in the square, I was not determined to yield this point.
Although I knew the answer already, and he has often invited me to visit him, since I just have seen her in the square, I am never determined to yield this point.
None is true.
Let us understand the definition of metaphysics, a purely speculative science, which occupies a completely isolated position and is entirely independent of the teachings of experience. It deals with mere conceptionsnot, like mathematics, with conceptions applied to intuitionand in it, reason is the pupil of itself alone. It is the oldest of the sciences. (_________________)
And it would struggle to survive without the architecture of mathematical support that it draws its strength from
Yet it continued to baffle mankind because of its abstractions
But it has never had and never will have the good fortune to attain to the sure scientific method
And it would still survive, even if all the rest were swallowed up in the abyss of an all-destroying barbarism
Who is the mother of R?
Q
Z
Y
X
Who among the following person has seminar at 3 P.M?
C
G
I
F
The village headman was unlettered, but he was no fool, he could see through the mystery of the businessmans proposition and promptly moved him down.
deception, forced
naivete, turned
potential, forced
sophistry, turned
Total no of female students in CSE is what % more than the male students in the same Dept ?
44.45%
40.76%
40.75%
40.66%
How many females are there in the family?
One
two
three
four
What does this mean that India will continue to be a haven of stability?
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.
Which among the following is a recently debated principle that Internet service providers and governments regulating the Internet should treat all data on the Internet the same, not discriminating or charging differentially by user, content, website, platform, application, type of attached equipment, or mode of communication?
Comcast
Net Neutrality
Oblique-net
Net Fraternity
After a credit card transaction has been authorized by the issuing bank by sending an authorization code to the merchant, the settlement stage of the process begins. Which of the following is a system type used to process such statements?
Multitasking
Memory Processing
Level Processing
Batch Processing
Statement: If you trouble me, I will slap you. - A mother warns her child.
Assumptions:
I. With the warning, the child may stop troubling her.
II. All children are basically naughty.
If only assumption I is implicit
If only assumption II is implicit
If either I or II is implicit
If neither I nor II is implicit
Statements : No photo is frame. All frames are sites. Some buckets are photos. Some sites are buckets.
Conclusions:
I. No photo is site.
II. All buckets being frames is a possibility
III. Some sites are photos
IV. Some buckets are frames.
All follows
Only II and III follow
Only II, III and IV follow.
Only either I or III follows
Statement : X × W, W @ Z , Z % Y
Conclusion:
I.Y $ W II.Z $ W III.X � Y
Only I is true
Ony II is true
Both I and II are true
Both I and III are true
Find the difference between Male population and Female population in the state WB ?
5.76 lak
4.67 lak
3.69 lak
3.96 lak
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.