Directions (1-10): Read the passage carefully and answer the questions given below it. Certain words/ phrases have been given in bold to help you locate them while answering some of the questions.
The government has uploaded the draft of the proposed Indian Financial Code (IFC) for public viewing. It extends to several areas, reflected in the document’s 94 chapters. Among the issues dealt with are many that have not received much attention in the past but are becoming increasingly relevant, such as consumer protection and infrastructure. Then there is the old chestnut, monetary policy. The draft’s view of monetary policy function has been commented upon in the press, but arguably what has received most attention are the governance aspects rather than the rationale of monetary policy as specified in the Code.
The Code prescribes that decisions on the interest rate shall rest with a committee and no longer with the governor. This committee is to be constituted as follows. There will be three members from the Reserve Bank of India, including its board, and four members appointed the government. It is believed that the balance is thus shifted toward the government, as the executive is seldom known to appoint persons who are fully independent of it.
This arrangement is tantamount to expecting the RBI to control inflation through a monetary policy committee in which it does not have a majority. Note that the bank will be statutorily expected to explain in writing when it fails to attain an inflation target set by the government. The proposed composition of the committee comes up against something akin to the principle of “no taxation without representation”. But the strangest part of the whole affair is the provision for a representative of the Centre who will participate in the deliberations without voting.
When all the other members are expected to give in writing why they have voted the way they have, the provision for an agent of the government to participate without voting amounts to surveillance. The government seriously underestimates the demoralising effect of such an arrangement, which could keep the best away from heading India’s monetary authority in the future. It must go, of course, and the majority of the RBI in the committee restored if it is to be held accountable for its actions.
The government could have avoided the credibility gap in the draft IFC had it been a little more aware of an almost three-decade-old debate among economists on the terms of independence for the central bank. In that debate, even those who bat for the primacy of the legislature in a democracy argue for the functional independence of the central bank. That is, while the central bank, as any other public body, cannot choose the goals, it must be granted functional autonomy once the goal itself has been arrived at by democratic means. Otherwise, it cannot be held accountable. This much is clear about the draft IFC’s proposals.
Q1. Which of the following has/have been dealt with in the proposed Indian Financial Code? Answer in the context of the passage.
(A) Monetary Policy
(B) Consumer protection and infrastructure
(C) Inclusive growth
(a) All (A), (B) and (C)
(b) Only (A) and (B)
(c) Only (B) and (C)
(d) Only (A) and (C)
(e) Only (B)
Q2. As prescribed in the Indian Financial Code, who will decide the interest rate?
(a) Finance Ministry
(b) A committee set up for the purpose of deciding the interest rate
(c) The governor of the RBI
(d) A high level committee comprising eminent economists and deputy governors of the RBI
(e) Other than the given options
Q3. What will the position of the RBI when the proposed Indian Financial Code (IFC) will come into force?
(A) The board members of the RBI will enjoy more autonomy in respect of making policy framework.
(B) The RBI will have to submit written explanation to the government if it fails to attain inflation target set by the government.
(C) The RBI will lose the power to make policy on containing inflation.
(a) Only (A)
(b) Only (B)
(c) Only (C)
(d) Only (A) and (B)
(e) Only (B) and (C)
Q4. Find the incorrect statement on the basis of the given passage.
(a) Certain aspects of IFC have got their mention in the document’s 94 chapters.
(b) The governance aspects of the monetary policy has been given more importance than the rationale of monetary policy.
(c) The 7-member committee will decide the interest rate.
(d) A representative appointed by the central government with veto power will participate in the deliberations.
(e) None of the above
Q5. Which of the following is not one of the opinions expressed by the author?
(A) The appointment of the agent by the Central government for the purpose of surveillance will have a demoralising effect on the apex bank.
(B) The inclusion of three members from the RBI in the interest-deciding committee will boost the morale of the RBI governor.
(C) The arrangement of the Central government agent must go and the majority of the RBI in the committee must be restored.
(a) Only (A) and (B)
(b) Only (B) and (C)
(c) Only (A) and (C)
(d)All (A), (B) and (C)
(e) None of these
Directions (6-8): Choose the word/group of words which is MOST SIMILAR in meaning to the word group of words printed in bold as used in the passage.
Q6. Tantamount
(a) reverse
(b) equal
(c) opposite
(d) variable
(e) unlike
Q7. Rationale
(a) venture
(b) deliberation
(c) plan
(d) consequence
(e) principle
Q8. Akin
(a) alien
(b) similar
(c) disconnected
(d) different
(e) against
Directions (9-10): Choose the word/group of words which is MOST OPPOSITE in meaning of the word/ group of words printed in bold as used in the passage.
Q9. Seldom
(a) hardly
(b) sometimes
(c) often
(d) sporadically
(e) scarcely
Q10. Autonomy
(a) liberty
(b) sovereignty
(c) dominance
(d) dependence
(e) aristocracy
Directions (11-15): Read each sentence to find out whether there is any grammatical or idiomatic error in it. The error, if any, will be in one part of the sentence. The number of that part is the answer. If there is ‘No error’, the answer is (e). (Ignore errors of punctuation, if any.)
Q11. (a) Well planned and congestion-free cities of Rajasthan has / (b) strong urban infrastructure with / (c) a variety of accommodation options/ (d) wide parks, schools and colleges and recreational facilities. / (e) No error.
(a) a
(b) b
(c) c
(d) d
(e) e
Q12. (a) The two stalwarts of Bihar may have accepted each other / (b) to keep his head above water / (c) but both seem to find it difficult / (d) to conceal the silent game of one up manship. / (e) No error.
(a) a
(b) b
(c) c
(d) d
(e) e
Q13. (a) Lord Meghnad Desai believes poverty is / (b) the biggest problem and a systematic strategy / (c) for generating rapid, high and inclusive growth / (d) is only solution. / (e) No error.
(a) a
(b) b
(c) c
(d) d
(e) e
Q14. (a) While schooling is about to discipline / (b) cadres into certain behaviours / (c) and responses, education is about / (d) building competence. / (e) No error.
(a) a
(b) b
(c) c
(d) d
(e) e
Q15. (a) Today, the first task is to grow good teachers / (b) so that it can grow / (c) the next generation to greatness, / (d) which is India’s aspiration. / (e) No error.
(a) a
(b) b
(c) c
(d) d
(e) e
Also check:
Solutions
S1. Ans. (b)
Sol. Refer to the first paragraph of the passage. “Among the issues dealt with are many that have not received much attention in the past but are becoming increasingly relevant, such as consumer protection and infrastructure.”
S2. Ans. (b)
Sol. Refer to the second paragraph of the passage. “The Code prescribes that decisions on the interest rate shall rest with a committee and no longer with the governor.”
S3. Ans. (e)
Sol. Refer to the third paragraph of the passage. “This arrangement is tantamount to expecting the RBI to control inflation through a monetary policy committee in which it does not have a majority. Note that the bank will be statutorily expected to explain in writing when it fails to attain an inflation target set by the government.”
S4. Ans. (d)
Sol. A representative appointed by the central government with veto power will participate in the deliberations.
S5. Ans. (c)
Sol. Statement (A) and (C) are opinions which are not expressed by the author in context of the passage.
S6. Ans. (b)
Sol. Tantamount means virtually the same as. So, equal is the word which is similar in meaning to it.
S7. Ans. (e)
Sol. Rationale means a set of reasons or a logical basis for a course of action or belief. So, principle is the word which is similar in meaning to it.
S8. Ans. (b)
Sol. Akin means of similar character. So, similar is the word which is similar in meaning to it.
S9. Ans. (c)
Sol. Seldom means not often or rarely. So, often is the word which is opposite in meaning to it.
S10. Ans. (d)
Sol. Autonomy means freedom from external control or influence; independence. So, dependence is the word which is opposite in meaning to it.
S11. Ans. (a)
Sol. Replace ‘has’ with ‘have’
S12. Ans. (b)
Sol. Replace ‘his head’ with ‘their heads’
S13. Ans. (d)
Sol. Insert ‘the’ before ‘only’
S14. Ans. (a)
Sol. Replace ‘to discipline’ with ‘disciplining’
S15. Ans. (b)
Sol. Replace ‘it’ with ‘they’
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