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SBI POs Prelims Model Paper
Directions (Q.No. I - 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 2016-17 budget implicitly recognises that a growth rate of 7.5 to 7.55 percent does not require an expansion of government expenditure or wide tax incentives, by sticking to the fiscal deficit target of 3.5 percent of the GDP for the next year. The decision to stick to fiscal targets enhances the credibility of the government, reduces the risk of contagion from world turmoil and sudden stops in capital flows and provides the basis for a reduction in policy inter-est rates by the RBI of up to 75 basic points. The proposed amendment of the RBI Act to create a monetary pol-icy committee will formalise flexible inflation targeting, enhance the credibility of the RBI and allow better monetary-fiscal policy balance.
When the fiscal deficit target for 2015-16 was loosened to accommodate more infrastructure investment by government, the question in our minds was whether the government would be able to shift expenditure from consumption and subsidies to investment. The fact that the revenue deficit for 2015-16 is 0.3 percentage point below the revised target suggests that it has successfully achieved an improvement in the quality of government expenditures. As the revenue deficit is a rough measure of government dis-saving, this will help raise national savings and reduce dependence on foreign savings. The revenue deficit is projected to decline by only 0.2 percent of the GDP in 2016-17 compared to the 0.4 percent of the GDP reduction in the fiscal deficit. This is partly due to wage pressures arising from the implementation of the pay commission report. However, the budget could have done much more on reform of the fertiliser, food and kerosene subsidy. In the longer term, the proposed bill to provide statutory backing for Aadhaar for providing targeted benefits will greatly improve the efficiency of subsidy expenditure and reduce leakages and corruption.
The adoption of the Kelkar Committee recommendations on public-private partnership would also help in completing stalled projects and reducing future regulatory uncertainty. Among the proposals in the budget are a public utility dispute resolution bill, guidelines for PPP renegotiations if the external environment changes unpredictably, and a credit rating system for infrastructure taking into account the special risks involved.
- What is / are the effect(s) of the decision to stick to fiscal targets ?
- (A) It enhances the credibility of the government.
- (B) It prompts the RBI to raise the rate of interest.
- (C) It reduces the negative effect of world turmoil and sudden stops in capital flows.
- Only (A) and (B)
- Only (B) and (C)
- Only (A) and (C)
- All (A), (B) and (C)
- Only (C)
- Which of the following statements in not true in the context of the passage ?
-
- In 2015-16 the fiscal deficit target was loosened to accommodate more infrastructure investment by the government.
- The revenue deficit for 2015-16 was 6-7 percentage points below the revised target.
- The revenue deficit is a rough measure of government savings.
- The revenue deficit is project-ed to decline only 0.2 percent of the GDP in 2016-17.
- None of these
- How will Kelkar Committee recommendations help ?
-
- (A) It will help in reducing future regulatory uncertainty.
- (B) It will help in creating credit rating system for infrastructure.
- (C) It will help in completing postponed projects.
- Only (A) and (B)
- Only (B) and (C)
- Only (A) and (C)
- All (A), (B) and (C)
- Only (C)
- What is / are the prerequisite (s) for sustained fast growth of the economy ?
-
- Policies for promoting growth
- A stable macro-economic framework
- Institutions for supporting competitive self-sustaining and job-creating business
- Only (1) and (2)
- All (1), (2) and (3)
- What will the proposed monetary policy committee do ?
-
- It will formalise flexible inflation targeting.
- It will enhance the credibility of the central bank.
- It will allow better monetary fiscal policy balance.
- Only (2) and (3)
- All (1), (2) and (3)
- Condemn
- Discredit
- Forgo
- Boost
- Dishonour
- Poison
- Contact
- Attack
- Corruption
- Transmission
- Hit
- Increased
- Improved
- Facilitated
- Encouraged
- Constant
- Following
- Connected
- Infrequent
- Continuous
- Finished
- Better
- Proposed
- High-tech
- New
- Intruded
- Encouraged
- Included
- Oppressed
- Engaged
- Tarnish
- Linger
- Dawdle
- Aim
- Knack
- Presentation
- Indictment
- Prosecutions
- Perusals
- Outlook
- Business
- Strategy
- Action
- Demeanour
- Conduct
- Expecting
- Irritating
- Surpassing
- Excluding
- Indulging
- to learns
- to learn
- at learning
- to have learn
- No correction required
- is being closed
- has been closed
- are closed
- to have closed
- No correction required
- would told you
- will tell you
- would have told you
- would be telling you
- No correction required
- of being
- to have been
- to being
- having being
- No correction required
- to seem to think
- seem to be thinking
- seem to have thought
- seemed to think
- No correction required
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