SBI PO Mains English Language Quiz- 14th July 2019

Directions (1-8): Read the following passage carefully and answer the questions given below it. Certain words are given in bold to help you locate them while answering some of the questions.

Viability of solar power projects in India has become a serious cause for concern. The recent decision of the Supreme Court not to allow a revision of the tariff charged by Tata Power Co. Ltd and Adani Power Ltd for their 4,000MW (megawatt) and 4,620MW Mundra ultra-mega power projects (UMPPs) based on Indonesian coal has added to the woes.

In 2006, it was decided to build UMPPs to take care of India’s crippling power woes. The allocation process was through a reverse tariff competitive bidding process, and the bid tariff was as low as Rs1.19 and Rs2.26 for domestic and imported coal-based UMPPs. But all these years later, only a few of them have been commissioned. One of the reasons for the failure of UMPPs was that when the bids were submitted, coal prices were very low. Subsequently, prices went up, making the projects unviable. The astonishing fact is that contrary to both common sense and international best practice, power purchase agreements (PPAs) with tenures of 25 years were written without a provision for a revision of terms.

The power purchase agreements are for fixed terms (25 years) without any escalation clause, even though there are many recurring expenses over this period. Subsequently, after failing to keep up with the changing market trends, projects become unviable for the operators. Internationally, levelized cost of electricity for solar is around Rs9/kWh while that for coal is approximately Rs4.8/kWh. An expert elicitation survey on solar technologies predicted that by increasing research and development funding by 50%, the cost of solar would come down to Rs4.45/kWh by 2030. From these studies, it is difficult to justify why the solar bid prices in India are so low. Bids in India have gone as low as Rs3.15/kWh. India’s solar programme is heavily dependent on imported solar cells and modules, mainly from China. In 2015-16, India had imported $2,34 billion worth of cells out of which 83.61% were from China. China uses predatory pricing and dumps cheap thin film solar cells to capture the Indian market in the absence of any anti-dumping duty imposed by India. India also lacks a robust manufacturing base for solar components and systems. It also does not have any infrastructure for raw material production. The increased reliance on thin film technologies has augmented the dependence on specific elements like “rare earth” metals in which China has a near monopoly. Under such circumstances, Indian solar project developers may find their projects unviable in the event of currency fluctuations or changes in China’s policy on solar cell and module exports. For both coal and solar power projects, the auction format used for reverse bidding is that of a sealed bid first price auction. The theory of auctions suggests that the use of a sealed bid auction format can lead to a winner’s curse in industries characterized by high uncertainty, or projects with very high time durations. Winning bidders can end up regretting their aggressive bids.

To end the uncertainty in bidding process, the solution is to go for a dynamic auction format where bidders can start from a maximum tariff and go downwards, after observing the pattern of bidding by others. This allows market information to become public, and reduces uncertainty for bidders.

The other way of reducing uncertainty is to adopt a counter-cyclical policy of tendering projects. The global commodities boom of the 2000s led to a bull market for power projects. Companies raised debt capital, mainly from public sector banks at concessional terms, and external commercial entities, on risky terms, to finance power sector projects that were being tendered out by the government. This is an important cause of the current non-performing assets crisis. Instead of riding the global commodities boom by encouraging public sector banks to lend to private companies, and giving project clearances, the government should be a restraining influence in such circumstances. Better governance of public sector banks is urgently needed. There should also be a clause for periodic review of power purchase agreements. Even if they are for fixed term, there should be escalation clause.

In the absence of such measures, despite our best intentions, the experience of thermal power will only be repeated in our solar mission. For government to achieve its ambitious goal of adding 60GW (gigawatt) of medium- and large-scale grid-connected power plants out of a total capacity addition of 100GW by 2022, a careful and informed policy is necessary.

Q1. According to the passage, what challenge(s) is/are being faced by solar sector in India?

Q2. According to the passage, what needs to be done to improve the solar sector in India? 

(i) Dependence on China for raw materials should be minimized. 

(ii) Power Purchase agreement should have escalation clause, even if they are for fixed term. 

(iii) Adopting a counter cyclical policy of tendering projects

Q3. Which of the following is the most appropriate title of the passage?

Q4. Which of the following is false in context of the passage?

Q5. According to the passage, what is/are the reason(s) for infeasibility of Ultra mega power project? 

(i) Dependence on imported solar cells and modules. 

(ii) Due to successive hike in coal prices after bidding. 

(iii) Due to non-reviewing of power purchase agreement periodically.

Q6. Choose the word/group of words which is most similar in meaning to the word/group of words printed in bold as used in passage.

Woes

Q7. Choose the word/group of words which is most similar in meaning to the word/group of words printed in bold as used in passage. 

Predatory

Q8. Choose the word/group of words which is most opposite in meaning to the word/group of words printed in bold as used in passage.

Elicitation

Directions (9-13): In each of the following sentence there are three blank spaces. Below each sentence there are five options and each option consists of three words which can be filled up in the blanks in the sentence to make the sentence meaningful and grammatically correct. 

Q9. As Prime Minister Narendra Modi travels through Sri Lanka for the UN Vesak Day celebrations, he will speak and hear much about the teachings of the world’s greatest ____________, Gautama Buddha. He is also certain to be mindful of Sri Lanka’s _______________with war, victory, militarism, the challenges of conflict resolution, and getting to peace and______________.

Q10. Most Tamil parents wanted their children to study and become civil servants, and even in the worst of times, _____________many difficulties to ensure that their sons and daughters attended school. ___________Tamil parents sat on dharna outside militant camps where their children had been________________.

Q11. Rivers, it seems, have gone out of the lives of large numbers of people in India, in cities surely. They do become part of public_________________, but only as items of disputes between riparian states, or as beneficiaries — or victims — of large projects or when they go into _______________and cause havoc, sometimes even when they run dry. But the river as a part of people’s day-to-day experiences is________________ a matter of public conversation.

Q12. The Ganga is one such sorry ____________ of garbage. Over the three decades, much money has gone into cleaning this cesspool: More than Rs 1,800 crore under the Ganga Action Plan in its various avatars. The current government ________________ to spend more than 10 times this amount: Rs 20,000 crore over five years on the Namami Gange Project. But the project that took off last year is ________________on its predecessor in very few respects.

Q13. The policy to implement legislation for the ______________of generic drugs by doctors is a good move, no doubt. But the _______________shown by the government in bringing this measure is odd and populist. It is extremely important to reduce the ________________of health-related costs on common people.

Directions (14-15): In each of the following questions, there are two phrases/group of words marked in bold which are either grammatically incorrect or not in formation with the correct sentence structure. Choose the best alternative among the four options given below each question to replace these two phrases to make the sentence meaningful and grammatically correct. In case both the phrases are correct, choose (e) i.e. ‘No correction required’ as your answer. 

Q14. The challenge will likely be more stubborn over the circumstances in the ongoing Fourth Industrial Revolution that has already fundamentally changed the way people live, work and connect to each other by eliminating physical boundaries and overcoming technology limitations.

Q15. One might argue that the figures of job loss in ASEAN, which comprises only ten Asian countries, are not sufficiently persuasive and representative to prove that developing Asian countries would probably be more negatively affected by Revolution 4.0.