Comprehension
Read the following passage carefully and answer the questions that
follow.
There is now no denying that the new government takes office amid a clear economic slowdown. The first macro data set released showed an under-performing economy with GDP growth falling to 5.8% in the fourth quarter of 2018-19 and pulling down the overall growth for the fiscal to a five-year low of 6.8%. Growth in gross value added (GVA), which is GDP minus taxes and subsidies, fell to 6.6% in 2018-19, pointing to a serious slowdown. If further confirmation were needed, the growth in core sector output - a set of eight major industrial sectors -fell to 2.6% in April, compared to 4.7% in the same month last year. And finally, unemployment data, controversially suppressed by the Union government so far, showed that joblessness was at a 45-year high of 6.1% in 2017-18. These numbers highlight the challenges ahead in drafting the Budget for 2019-20. The economy is beset bya consumption slowdown as reflected in the falling sales of everything from automobiles to consumer durables, even fast-moving consumer goods. Private investment is not taking off, while government spending, which kept the economy afloat during the last NDA government, was cut back in the last quarter of 2018-19 to meet the fiscal deficit target of 3.4%. The gooр news is that inflation is undershooting the target and oil prices are on the retreat again. But the rural economy remains in distress, as seen by the 2.9% growth in agriculture last fiscal; the sector needs a good monsoon this year to bounce back. Overall economic growth in the first quarter of this fiscal is likely to remain subdued, and any improvement is unlikely until the late second quarter or the early third. There are not too many options before the new Finance Minister. In the near term, she has to boost consumption, which means putting more money in the hands of people. That, in turn, means cutting taxes, which is not easy given the commitment to rein in the fiscal deficit. In the medium term, Ms. Sitharaman has to take measures to boost private investment even as she opens up public spending again. These call for major reforms, starting with land acquisition and labour, corporate taxes by reducing exemptions and dropping rates,and nursing banks back to health. On the table will be options such as further recapitalisation of the ailing banks, and consolidation. The question, though, is where the money will come from. With tax revenues likely to be subdued owing to the slowdown, the Centre will have to look at alternative sources such as disinvestment. There may be little choice but to go big on privatisation. A rate cut by the Reserve Bank of India, widely expected this week, would certainly help boost sentiment. But it is the Budget that will really set the tone for the economy.
There is now no denying that the new government takes office amid a clear economic slowdown. The first macro data set released showed an under-performing economy with GDP growth falling to 5.8% in the fourth quarter of 2018-19 and pulling down the overall growth for the fiscal to a five-year low of 6.8%. Growth in gross value added (GVA), which is GDP minus taxes and subsidies, fell to 6.6% in 2018-19, pointing to a serious slowdown. If further confirmation were needed, the growth in core sector output - a set of eight major industrial sectors -fell to 2.6% in April, compared to 4.7% in the same month last year. And finally, unemployment data, controversially suppressed by the Union government so far, showed that joblessness was at a 45-year high of 6.1% in 2017-18. These numbers highlight the challenges ahead in drafting the Budget for 2019-20. The economy is beset bya consumption slowdown as reflected in the falling sales of everything from automobiles to consumer durables, even fast-moving consumer goods. Private investment is not taking off, while government spending, which kept the economy afloat during the last NDA government, was cut back in the last quarter of 2018-19 to meet the fiscal deficit target of 3.4%. The gooр news is that inflation is undershooting the target and oil prices are on the retreat again. But the rural economy remains in distress, as seen by the 2.9% growth in agriculture last fiscal; the sector needs a good monsoon this year to bounce back. Overall economic growth in the first quarter of this fiscal is likely to remain subdued, and any improvement is unlikely until the late second quarter or the early third. There are not too many options before the new Finance Minister. In the near term, she has to boost consumption, which means putting more money in the hands of people. That, in turn, means cutting taxes, which is not easy given the commitment to rein in the fiscal deficit. In the medium term, Ms. Sitharaman has to take measures to boost private investment even as she opens up public spending again. These call for major reforms, starting with land acquisition and labour, corporate taxes by reducing exemptions and dropping rates,and nursing banks back to health. On the table will be options such as further recapitalisation of the ailing banks, and consolidation. The question, though, is where the money will come from. With tax revenues likely to be subdued owing to the slowdown, the Centre will have to look at alternative sources such as disinvestment. There may be little choice but to go big on privatisation. A rate cut by the Reserve Bank of India, widely expected this week, would certainly help boost sentiment. But it is the Budget that will really set the tone for the economy.
Question: 1
Which of the following is the closest in meaning to the word beset?
Which of the following is the closest in meaning to the word beset?
Show Hint
For vocabulary:
- Focus on context-based meaning
- Eliminate clearly unrelated options first
Updated On: Apr 1, 2026
- Besiege
- Terminate
- Filter
- Tiny
- Huge
Show Solution
The Correct Option is A
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Question: 2
Which of the following is/are true as per the passage?
I. There is going to be a definite rate cut by the RBI in the coming week.
II. The rural economy is in better shape than the urban economy.
III. Government spending has increased in the last quarter of 2018-19.
Which of the following is/are true as per the passage?
I. There is going to be a definite rate cut by the RBI in the coming week.
II. The rural economy is in better shape than the urban economy.
III. Government spending has increased in the last quarter of 2018-19.
II. The rural economy is in better shape than the urban economy.
III. Government spending has increased in the last quarter of 2018-19.
Show Hint
In RC questions:
- “Expected” ≠ “Definite”
- Avoid assumptions beyond given text
Updated On: Apr 1, 2026
- Only I
- Only I and II
- Only I and III
- Only II and III
- Not any of the above
Show Solution
The Correct Option is
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Question: 3
Which of the following, as per the passage, indicates a slowdown in the Indian economy?
I. Fall in sale levels of consumer durables
II. Negative growth in the core sector output
III. Fall in inflation levels
Which of the following, as per the passage, indicates a slowdown in the Indian economy?
I. Fall in sale levels of consumer durables
II. Negative growth in the core sector output
III. Fall in inflation levels
II. Negative growth in the core sector output
III. Fall in inflation levels
Show Hint
In RC:
- Choose only what is clearly supported
- Do not infer beyond the passage
Updated On: Apr 1, 2026
- Only I
- Only III
- Only II
- Only I and II
- All I, II and III
Show Solution
The Correct Option is D
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Question: 4
As per the passage, which of the following would lead to ‘putting more money in the hands of people’?
I. Decrease in tax rates
II. Increase in inflation
III. Increase in private investment
As per the passage, which of the following would lead to ‘putting more money in the hands of people’?
I. Decrease in tax rates
II. Increase in inflation
III. Increase in private investment
II. Increase in inflation
III. Increase in private investment
Show Hint
Focus on direct statements in RC:
- “Cutting taxes” → directly increases disposable income
Updated On: Apr 1, 2026
- Only I
- Only III
- Only I and II
- Only I and III
- Only II
Show Solution
The Correct Option is A
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Question: 5
As per the passage, which of the following reforms has NOT been mentioned in the passage to improve the investment climate?
As per the passage, which of the following reforms has NOT been mentioned in the passage to improve the investment climate?
Show Hint
For “NOT mentioned” questions:
- Carefully scan passage
- Eliminate options that are clearly stated
Updated On: Apr 1, 2026
- Land acquisition
- Privatization of banks
- Adjustment in the prevailing Corporate Tax Rates
- Recapitalization of banks
- All are correct
Show Solution
The Correct Option is B
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