Directions (1-15): Read the following passage carefully and answer
these questions. Certain words have been printed in bold to help you locate
them while answering some of the questions.
these questions. Certain words have been printed in bold to help you locate
them while answering some of the questions.
Political ploys initially hailed as master-strokes often end up as
flops. The Rs. 60,000 crore farm loan waiver announced in the budget writes off
100% of overdues of small and marginal farmers holding up to two hectares, and
25% of overdues of larger farmers. While India has enjoyed 8%-9% GDP growth for
the past few years, the boom has bypassed many rural areas and farmer distress
and suicides have made newspaper headlines. Various attempts to provide relief
(employment guarantee scheme, public distribution system) have had little
impact, thanks to huge leakages from the government’s lousy delivery systems.
So, many economists think the loan waiver is a worthwhile alternative to
provide relief.
flops. The Rs. 60,000 crore farm loan waiver announced in the budget writes off
100% of overdues of small and marginal farmers holding up to two hectares, and
25% of overdues of larger farmers. While India has enjoyed 8%-9% GDP growth for
the past few years, the boom has bypassed many rural areas and farmer distress
and suicides have made newspaper headlines. Various attempts to provide relief
(employment guarantee scheme, public distribution system) have had little
impact, thanks to huge leakages from the government’s lousy delivery systems.
So, many economists think the loan waiver is a worthwhile alternative to
provide relief.
However, the poorest rural folk are landless labourers, who get neither farm
loans nor waivers. Half of small and marginal farmers get no loans from banks
and depend entirely on moneylenders, and will not benefit. Besides, rural India
is full of family holdings rather than individual holdings, and family holdings
will typically be much larger than two hectares even for dirt-poor farmers, who
will, therefore, be denied the 100% waiver. It will thus fail in both its
economic and political objectives. IRDP loans to the rural poor in the 1980s
demonstrated that crooked bank officials demand bribes amounting to one-third
the intended benefits. Very few of the intended beneficiaries who merited
relief received it. After the last farm loan waiver in 1990, many banks went
slow on fresh farm loans for some years. This waiver will similarly slow down
fresh loans to deserving farmers. While overdues to cooperatives may be higher,
economist Surjit Bhalla says less than 5% of farmer loans to banks are overdue
i.e. overdues exist for only 2.25 million out of 90 million farmers. If so,
then the 95% who have repaid loans will not benefit. They will be angry at
being penalized for honesty.
The budget thus grossly overestimates the number of beneficiaries.
It also underestimates the negative effects of the waiver-encouraging willful
defaults in future and discouraging fresh bank lending for some years. Instead
of trying to reach the needy through a plethora of leaky schemes we should
transfer cash directly to the needy, using new technology like biometric smart
cards, which are now being used in many countries, and mobile phone bank
accounts. Then benefits can go directly to phone accounts operable only by
those with biometric cards, ending the massive leakages of current schemes.
It also underestimates the negative effects of the waiver-encouraging willful
defaults in future and discouraging fresh bank lending for some years. Instead
of trying to reach the needy through a plethora of leaky schemes we should
transfer cash directly to the needy, using new technology like biometric smart
cards, which are now being used in many countries, and mobile phone bank
accounts. Then benefits can go directly to phone accounts operable only by
those with biometric cards, ending the massive leakages of current schemes.
The political benefits of the loan waiver have also been
exaggerated since if only a small fraction of farm families benefit, and many
of these have to pay bribes to get the actual benefit, will the waiver really
be a massive vote-winner? Members of joint families will feel aggrieved that,
despite having less than one hectare per head, their family holding is too
large to qualify for the 100% waiver. All finance ministers, of the central or
state governments, give away freebies in their last budgets, hoping to win electoral
regards. Yet, four-fifth of all incumbent governments are voted out. This shows
that beneficiaries of favours are not notably grateful, while those not so
favoured may feel aggrieved, and vote for the Opposition. That seems to be why
election budgets constantly fail to win elections in India and the loan waiver
will not change that pattern.
exaggerated since if only a small fraction of farm families benefit, and many
of these have to pay bribes to get the actual benefit, will the waiver really
be a massive vote-winner? Members of joint families will feel aggrieved that,
despite having less than one hectare per head, their family holding is too
large to qualify for the 100% waiver. All finance ministers, of the central or
state governments, give away freebies in their last budgets, hoping to win electoral
regards. Yet, four-fifth of all incumbent governments are voted out. This shows
that beneficiaries of favours are not notably grateful, while those not so
favoured may feel aggrieved, and vote for the Opposition. That seems to be why
election budgets constantly fail to win elections in India and the loan waiver
will not change that pattern.
Q1. Why do economists feel that loan waivers will benefit farmers in distress?
(a) It will
improve the standard of living of those farmers who can afford to repay their
loans but are exempted.
improve the standard of living of those farmers who can afford to repay their
loans but are exempted.
(b) Other
government relief measures have proved ineffective.
government relief measures have proved ineffective.
(c) Suicide
rates of farmers have declined after the announcement of the waiver.
rates of farmers have declined after the announcement of the waiver.
(d) Farmers
will be motivate to increase the size of their family holdings not individual
holdings.
will be motivate to increase the size of their family holdings not individual
holdings.
(e) The
governments will be forced to reexamine and improve the public distribution
system.
governments will be forced to reexamine and improve the public distribution
system.
Q2. What
message will the loan waiver send to farmers who have repaid loans?
message will the loan waiver send to farmers who have repaid loans?
(a) The
Government will readily provide them with loans in the future.
Government will readily provide them with loans in the future.
(b) As
opposed to money lenders banks are a safer and more reliable source of credit.
opposed to money lenders banks are a safer and more reliable source of credit.
(c) Honesty
is the best policy.
is the best policy.
(d) It is
beneficial to take loans from cooperatives since their rates of interest are
lower.
beneficial to take loans from cooperatives since their rates of interest are
lower.
(e) None of
these
these
Q3. What is
the author’s suggestion to provide aid to farmers?
the author’s suggestion to provide aid to farmers?
(a) Families
should split their joint holding to take advantage of the loan waiver.
should split their joint holding to take advantage of the loan waiver.
(b) The
government should increase the reach of the employment guarantee scheme.
government should increase the reach of the employment guarantee scheme.
(c) Loans
should be disbursed directly into bank accounts of the farmer using the latest
technology.
should be disbursed directly into bank accounts of the farmer using the latest
technology.
(d) Government
should ensure that loan waivers can be implemented over a number of years.
should ensure that loan waivers can be implemented over a number of years.
(e) Rural
infrastructure can be improved using schemes which were successful abroad.
infrastructure can be improved using schemes which were successful abroad.
Q4. What was the outcome of IRDP loans to the rural poor?
(a) The
percentage of bank loan sanctioned to family owned farms increased.
percentage of bank loan sanctioned to family owned farms increased.
(b) The
loans benefited dishonest money-lenders not landless labourers.
loans benefited dishonest money-lenders not landless labourers.
(c) Corrupt
bank officials were the unintended beneficiaries of the loans.
bank officials were the unintended beneficiaries of the loans.
(d) It
resulted in the government sanctioning thrice the amount for the current loan
waiver.
resulted in the government sanctioning thrice the amount for the current loan
waiver.
(e) None of
these
these
Q5. What are
the terms of the loan waiver?
the terms of the loan waiver?
(A)
One-fourth of the overdue loans of landless labourers will be written off.
One-fourth of the overdue loans of landless labourers will be written off.
(B) The Rs.
60,000 crore loan waiver has been sanctioned for 2.25 million marginal farmers.
60,000 crore loan waiver has been sanctioned for 2.25 million marginal farmers.
(C) Any
farmer with between 26 percent to 100 percent of their loan repayments overdue
will be penalized.
farmer with between 26 percent to 100 percent of their loan repayments overdue
will be penalized.
(a) Only (A)
(b) Only (B)
(c) Both (B)
& (C)
& (C)
(d) All (A),
(B) & (C)
(B) & (C)
(e) None of
these
these
Q6. What is
the author’s view of the loan waiver?
the author’s view of the loan waiver?
(a) It will
have an adverse psychological impact on those who cannot avail of the waiver.
have an adverse psychological impact on those who cannot avail of the waiver.
(b) It is a
justified measure in view of the high suicide rate among landless labourers.
justified measure in view of the high suicide rate among landless labourers.
(c) It makes
sound economic and political sense in the existing scenario.
sound economic and political sense in the existing scenario.
(d) It will
ensure that the benefits of India’s high GDP are felt by the rural poor.
ensure that the benefits of India’s high GDP are felt by the rural poor.
(e) None of
these
these
Q7. Which of
the following cannot be said about loan waiver?
the following cannot be said about loan waiver?
(A) Small
and marginal farmers will benefit the most.
and marginal farmers will benefit the most.
(B) The loan
waiver penalizes deserving farmers.
waiver penalizes deserving farmers.
(C) A large
percentage i.e. ninety-five percent of distressed farmers will benefit.
percentage i.e. ninety-five percent of distressed farmers will benefit.
(a) Only (C)
(b) Both (A)
& (C)
& (C)
(c) Only (A)
(d) Both (B)
& (C)
& (C)
(e) None of
these
these
Q8. Which of
the following will definitely be an impact of loan waivers?
the following will definitely be an impact of loan waivers?
(A) Family
holdings will be split into individual holdings not exceeding one hectare.
holdings will be split into individual holdings not exceeding one hectare.
(B) The
public distribution system will be revamped.
public distribution system will be revamped.
(C)
Opposition will definitely win the election.
Opposition will definitely win the election.
(a) None
(b) Only (A)
(c) Both (A)
& (B)
& (B)
(d) Only (C)
(e) All (A),
(B) & (C)
(B) & (C)
Q9. What
impact will the loan waiver have on banks?
impact will the loan waiver have on banks?
(a) Banks
have to bear the entire brunt of the write off.
have to bear the entire brunt of the write off.
(b) Loss of
trust in banks by big farmers.
trust in banks by big farmers.
(c) Corruption
among bank staff will increase.
among bank staff will increase.
(d) Framers
will make it a habits to default on loans
will make it a habits to default on loans
(e) None of
these
these
Q10.
According to the author what is the government’s motive in sanctioning the loan
waiver?
According to the author what is the government’s motive in sanctioning the loan
waiver?
(a) To
encourage farmers to opt for bank loans over loans from money lenders.
encourage farmers to opt for bank loans over loans from money lenders.
(b) To raise
90 million farmers out of indebtedness.
90 million farmers out of indebtedness.
(c) To
provide relief to those marginal farmers who have the means to but have not
repaid their loans
provide relief to those marginal farmers who have the means to but have not
repaid their loans
(d) To
ensure they will be reelected
ensure they will be reelected
(e) None of
these
these
Directions
(11-13): Choose the word which is most nearly the same in meaning as the word
printed in bold as used in the passage.
(11-13): Choose the word which is most nearly the same in meaning as the word
printed in bold as used in the passage.
Q11. Incumbent
(a)
Mandatory
Mandatory
(b) Present
(c) Incapable
(d) Lazy
(e)
Officious
Officious
Q12. Ploys
(a) Surveys
(b) Entreaties
(c) Ruses
(d)
Conspiracies
Conspiracies
(e)
Assurances
Assurances
Q13. Aggrieved
(a) Vindicated
(b) Intimidated
(c) Offensive
(d) Wronged
(e) Disputed
Directions
(14-15): Choose the word/phrase which is most opposite in meaning of the word
printed in bold as used in the passage.
(14-15): Choose the word/phrase which is most opposite in meaning of the word
printed in bold as used in the passage.
Q14. Plethora
(a) Dearth
(b) Missing
(c) Superfluous
(d) Sufficient
(e) Least
Q15. Merited
(a) Ranked
(b) Unqualified
for
for
(c) Lacked
(d) Inept at
(e) Unworthy
of
of
Solutions
S1. Ans.(b)
Sol. Other government relief measures
have proved ineffective.
have proved ineffective.
S2. Ans.(e)
Sol. None of these
S3. Ans.(c)
Sol. Loans should be disbursed
directly into bank accounts of the farmer using the latest technology.
directly into bank accounts of the farmer using the latest technology.
S4. Ans.(c)
Sol. Corrupt bank officials were the
unintended beneficiaries of the loans.
S5. Ans.(e)
Sol. None of these
S6. Ans.(a)
Sol. It will have an adverse
psychological impact on those who cannot avail of the waiver.
psychological impact on those who cannot avail of the waiver.
S7. Ans.(a)
Sol. Only (C)
Sol. None
S9. Ans.(e)
Sol. None of these
S10. Ans.(d)
Sol. To ensure
they will be reelected
they will be reelected
S11. Ans.(a)
Sol. incumbent- necessary for (someone)
as a duty or responsibility.
as a duty or responsibility.
S12. Ans.(c)
Sol. ploy-a cunning plan or action
designed to turn a situation to one’s own advantage.
designed to turn a situation to one’s own advantage.
ruse- an action intended to deceive someone; a trick.
S13. Ans.(d)
Sol. aggrieved-feeling anger because of
unfair treatment
unfair treatment
S14. Ans.(a)
Sol. plethora-a large or excessive
amount of something.
amount of something.
S15. Ans.(e)
Sol. merit-deserve or be worthy of
(reward, punishment, or attention).
(reward, punishment, or attention).
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