Reading Comprehension Practice Set 34


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Reading Comprehension Practice Set 34



It is difficult to imagine the extraordinary number of controls on Indian industry before 1991. Entrepreneurs needed permission to invest and could be penalized for exceeding production capacity. Even with the given investment capacity they had, entering certain areas was prohibited as these were reserved for the public sector. If they had to import anything, they required licenses. To get these licenses was tough, they had to persuade a bureaucrat that the item was required but even so permission was unavailable if somebody was already producing it in India. The impact of the reforms was not instantaneously and permanently wonderful. In India‘s case it began to show after about a year-and-a-half. After 1993 there came three years of rapid industrial growth of about 8% or so. But, in the second half of the 90s, there had an impact on the Indian industry. But, in the last few years there has been a tremendous upturn. With the rise of investment industrial growth has reached double digits or close.
However, even during the period when industrial growth was not that rapid, there is a lot of evidence that positive results of the reforms were seen. There were companies that didn‘t look at all internally but instead performed remarkably n the highly competitive global market. Reliance built a world-class refinery. Tatas developed an indigenously designed car. The success of the software sector has created much higher expectations from and much higher confidence in what Indian industry can do. On the government‘s side it‘s a vindication that liberalization of both domestic and external policies, including the increased inflow of Foreign Direct Investment, has created an environment in which industry can do well, has done well and is preparing to do even better. What they need is not sops, but good quality infrastructure. For the 11th Plan an industrial growth rate of around 12% is projected. It will have methods of developing infrastructure, which will close the deficit. This can be done through increased investment in public sector for those infrastructure areas, which cannot attract private investment, and through efforts to improve private participation in different ways of public-private participation.
In the early stages of reforms, the liberalization of trade policies and a shift to a market-determined exchange rate had the effect of removing constrains on agriculture in terms of depressed prices. The removal of protection on industry helped to produce a  more level playing field, because the earlier system was extremely unfair to agriculture. The lesson to be learnt from the reforms process is to preserve in reforming the strategic parts of the economy, which will lead to even higher growth rate. India has to do better than its current average growth rate of 8% and ensure that benefits from this higher growth go beyond industry and urban areas and extend to agriculture.

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Questions based on Passage

1. Which of the following was not a restriction on Indian industry prior to 1991?

(A) A private business needed government sanction to invest in any sector.

(B) Industrial growth had to be maintained at a certain percentage fixed by the government.

(C) It was difficult to obtain licenses.

(a)All A, B and c

(b) Only B

(c) Only C

(d) Both A and C

(e) None of the above

2. Which of the following factors was responsible for the fall of India‘s growth rate in the late 1990s?

(a) The implementation of economic reforms was too rapid.

(b) It was expected after achieving a high growth at 10%

(c) There was a slowdown in the global economy

(d) There were sanctions against East Asian countries by WTO

(e) The software sector grew but the other sectors were neglected

3. Which of the following can be said about the reforms of 1991?

(a) They benefited Indian industry immediately.

(b) All Indian companies began to focus on indigenous development instead of looking for opportunities abroad


(c) They were targeted only at the software sector

(d) Indian was among the worst affected countries by the East Asian economic crisis because it had opened up its economy.

(e) They encouraged Foreign Direct Investment in India.

4. What was the impact of the flourishing Indian software sector?

(a) Other companies were unable to be competitive in the global market.

(b) It filled expectations of a good performance from the Indian economy

(c) Growth rate rose to 12%

(d) It created cut throat competition among software companies which would hinder the sector in the long run

(e) None of the above

5. Why was investment by private business disallowed in certain sectors?

(a) To ensure proper development in these sectors

(b) To prevent corruption in key sectors like infrastructure

(c) To ensure steady not inconsistent growth in key sectors

(d) To protect the interest of the public sector in these sectors

(e) None of the above

6. What is the author‘s opinion about the government‘s decision to liberalize the economy in 1991?

(a) It was beneficial because it created confidence in the Indian economy

(b) The timing was wrong since the economy experienced a slowdown in growth rate

(c) It led to a focus on software and other sectors were neglected

(d) Foreign companies took advantage of the new policies and exploited certain sectors

(e) None of the above

7. How did software companies deal with slow industrial growth in an open Indian industry?

(a) The focused on strengthening their position in the domestic market

(b) They campaigned for infrastructure development

(c) They diversified into different sectors

(d) They entered into partnerships with public sector enterprises in reserved sectors

(e) They targeted global markets

8. Which of the following is NOT true in the context of the passage?

(A) India experienced a slowdown in growth during the late 1990s because initially the economic growth rate was too rapid

(B) There were a few stringent regulations on Indian industries which kept economic growth below 12%.

(C) Companies did not get import licenses for goods if they were being indigenously produced.

(a)Only A

(b) Both B and C

(c) Both A and B

(d) All A, B and C

(e) None of the above

9. What does the author recommend to ensure that the industrial continues to perform better?

(a) Subsidies should be provided in infrastructure development

(b) Government should keep control of and monitor all infrastructure projects

(c) Wipe out any infrastructure deficit by transferring responsibility of these projects to the private sector

(d) Ensure a combination of public and private sector involvement in developing infrastructure

(e) None of the above

10. How did the economic reforms affect the agriculture sector?

(a) A system of market determined exchange rate was introduced constraints in agriculture increase

(b) Constraints in agriculture increase

(c) Prices were depressed because there was a removal of protection on the sector

(d) Agriculture growth rate doubled

(e) The agriculture sector was not a part of the reforms process

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.


(a) unusual

(b) wonderful

(c) rare

(d) beautiful

(e) strange

12. RISE

(a) stand

(b) increase

(c) slope

(d) upward

(e) progress


(a) discussed

(b) needed

(c) estimate

(d) achieved

(e) thrown

Directions (14-15): Choose the word which is most OPPOSITE in meaning of the word printed in bold as used in the passage.


(a) lose

(b) hide

(c) chase

(d) disturb

(e) stop


(a) ugly

(b) offend

(c) push

(d) sick

(e) reject

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Answer Key

1. (b) 2. (c) 3. (e) 4. (b) 5. (d) 6. (a) 7. (e) 8. (c) 9. (d) 10. (e) 11. (a) 12. (b) 13. (c) 14. (e) 15. (e)

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