Insights Revision Plan for Prelims 2016: Test – 41

Passage -1

Many nations now place their faith in capitalism and governments choose it as the strategy to create wealth for their people. The spectacular economic growth seen in Brazil, China and India after the liberalisation of their economies is proof of its enormous potential and success. However, the global banking crisis and the economic recession have left many bewildered. The debates tend to focus on free market operations and forces, their efficiency and their ability for self correction. Issues of justice, Integrity and honesty are rarely elaborated to highlight the failure of the global banking system. The apologists of the system continue to justify the success of capitalism and argue that the recent crisis was a blip.

Their arguments betray an Ideological bias with the assumptions that an unregulated market is fair and competent, and that the exercise of private greed will be in the larger public interest.

Few recognize the bidirectional relationship between capitalism and greed; that each reinforces the other. Surely, a more honest conceptualisation of the conflicts of interest among the rich and powerful players who have benefited from the system, their biases and ideology is needed; the focus on the wealth. creation should also highlight the resultant gross inequity.

 The apologists of the “Free Market System”, according to the passage, believe in

With reference to “ideological bias”, the passage implies that

“The exercise of private greed will be in the larger public interest” from the passage

1. refers to the false ideology of capitalism.

2. underlies the righteous claims of the free market.

3. shows the benevolent face of capitalism.

4. ignores resultant gross inequity.

Which of the statements given above is/are correct?

Passage – 2

Net profits are only 2.2% of their total assets for central public sector undertakings, lower than for the private corporate sector. While the public sector or the State-led entrepreneurship played an important role in triggering India’s industrialization, our evolving development needs, comparatively less-than-satisfactory performance of the public sector enterprises, the maturing of our private sector, a much larger social base now available for expanding entrepreneurship and the growing institutional capabilities to enforce competition policies would suggest that the time has come to review the role of public sector.

What should the portfolio composition of the government be? It should not remain static all times. The airline industry works well as a purely private affair. At the opposite end, rural roads, whose sparse traffic makes tolling unviable, have to be on the balance-sheet of the State. If the government did not own rural roads, they would not exist.

Similarly, public health capital in our towns and cities will need to come from the public sector. Equally, preservation and improvement of forest cover will have to be a new priority for the public sector assets.

Take the example of steel. With near-zero tariffs, India is a globally competitive market for the metal. Indian firms export steel into the global market which demonstrates there is no gap in technology. Indian companies are buying up global steel companies, which shows there is no gap in capital availability. Under these conditions, private ownership works best.

Private ownership is clearly desirable in regulated industries, ranging from, finance to infrastructure, where a government agency performs the function of regulation and multiple competing firms are located in the private sector. Here, the simple and clean solution – government as the umpire and the private sector as the players is what works best. In many of these industries, we have a legacy of government ownership, where productivity tends to be lower, fear of bankruptcy is absent, and the risk of asking for money from the tax payer is ever present. There is also the conflict of interest between government as an owner and as the regulator.

The formulation and implementation of competition policy will be more vigorous and fair if government companies are out of action.

 According to the passage, what is/are the reason/reasons for saying that the time has come to review the role of public sector?

1. Now public sector has lost its relevance in the industrialization process.
2. Public sector does not perform satisfactorily.
3. Entrepreneurship in private sector is expanding.
4. Effective competition policies are available now.

Which of the statements given above is/are correct in the given context?

According to the passage, rural roads should be in the domain of public sector only. Why?

The portfolio composition of the government refers to

The author prefers government as the umpire and private sector as players because

Passage -3

Climate change poses potentially devastating effects on India’s agriculture. While the overall parameters of climate change are increasingly accepted a 1°C average temperature increase over the next 30 years, sea level rise of less than 10 cm in the same period, and regional monsoon variations and corresponding droughts – the impacts in India are likely to be quite site and crop specific. Some crops may respond favourably to the changing conditions, others may not. This emphasizes the need to promote agricultural research and create maximum flexibility in the system to permit adaptations.

The key ingredient for “drought proofing” is the managed recharge of aquifers. To ensure continued yields of important staple crops (e.g. wheat), it may also be necessary to shift the locations where these crops are grown, in response to temperature changes as well as to water availability. The latter will be a key factor in making long term investment decisions.

For example, water runoff from the Himalayas is predicted to increase over the next 30 years as glaciers melt, but then decline substantially thereafter. It will be critical to provide incentives to plan for these large-scale shifts in agro-ecological conditions.

India needs to make long term investment in research and development in agriculture. India is likely to experience changed weather patterns in future.

Consider the following statements:

Climate change may force the shifting of locations of the existing crops due to

1. melting of glaciers.
2. water availability and temperature suitability at other locations.
3. poor productivity of crops.
4. wider adaptability of crop plants.

Which of the statements given above are correct?

According to the passage, why is it important to promote agricultural research in India?

Passage  – 4

It is essential that we mitigate the emissions of greenhouse gases .and thus avoid some of the worst impacts of climate change that would take place in coming years and decades. Mitigation would require a major shift in the way we produce and consume energy. A shift away from overwhelming dependence on fossil fuels is now long overdue, but unfortunately, technological development has been slow arid inadequate largely because government policies have not promoted investments in research and development, myopically as a result of relatively low prices of oil. It is now, therefore, imperative for a country like India treating the opportunity of harnessing renewable energy on a large scale as a national imperative. This country is extremely well endowed with solar, wind and biomass sources of energy. Where we have lagged, unfortunately, is in our ability to develop and to create technological solutions for harnessing these resources.

One particular trajectory for carrying out stringent mitigation of greenhouse gas emissions assessed by the Inter-governmental Panel on Climate Change (IPCC) clearly shows the need for ensuring that global emissions of greenhouse gases peak no later than 2015 and reduce rapidly thereafter. The cost associated with such a trajectory is truly modest” and would amount, in the estimation of IPCC, to not more than 3 percent of the global GDP in 2030. In other words, the level of prosperity that the world would have reached without mitigation would at worst be postponed by a few months or a year at the most. This is clearly not a very high price to pay for protecting hundreds of millions of people from the worst risks associated with climate change. Any such effort, however, would require lifestyles to change appropriately also. Mitigation of greenhouse gas emissions is not a mere technological fix, and clearly requires changes in lifestyles and transformation of a country’s economic structure, whereby effective reduction in emissions is brought about, such as through the consumption of much lower quantities of animal protein. The Food and Agriculture Organization (FAO) has determined that the emissions from the livestock sector amount to 18 percent of the total. The reduction of emissions from this source is entirely in the hands of human beings, who have never questioned the impacts that their dietary habits of consuming more and more animal protein are bringing about. Mitigation overall has huge co-benefits, such as lower air pollution and health benefits, higher energy security and greater employment.

According to the passage, which of the following would help in the mitigation of greenhouse gases?

1. Reducing the consumption of meat

2. Rapid economic liberalization

3. Reducing the consumerism

4. Modern management practices of livestock

Select the correct answer using the code given below:

Why do we continue to depend on the fossil fuels heavily?

1. Inadequate technological development

2. Inadequate funds for research and development

3. Inadequate availability of alternative sources of energy

Select the correct answer using the code given below:

According to the passage, how does the mitigation of greenhouse gases help us?

1. Reduces expenditure on public health

2. Reduces dependence on livestock

3. Reduces energy requirements

4. Reduces rate of global climate change

Select the correct answer using the code given below: