Reading compresion test

Question 1 of 4

Medal-premium 1

PASSAGE 1 :

The idea of demarcating certain areas within the country as special economic zones to promote investment and growth is not new. A large country unable to provide the kind of facilities and environment that can attract foreign investment throughout the country often finds it feasible and attractive to carve up some of its areas where such facilities can be provided. The laws and procedures for setting up new industries are waived to make the area business-friendly with developed infrastructure and a one-window interaction with government. In addition, huge tax benefits are promised to lure investors. China’s experience shows that if chalked out and implemented with care such a policy can accelerate the flow of capital and technology from abroad and thereby speed up growth.

However, SEZs may not be the best option in all situations to clear the bottlenecks in growth. India’s experience with export processing zones (EPZs) bears this out. They have failed in India for the simple reason that the factors that made the SEZs successful in China have been absent here.

In India, as in China, EPZs were thought of as a way of providing an escape route from the stranglehold of control that prevailed over the Indian economy. But even while promising to ease the rigours of controls, Indian policy-makers could not give up their penchant for micromanaging from the centre and undoing the promised relaxations with all kinds of qualifications and “guidelines”.

Over last two decades India has evolved into a market economy and much of governmental control has disappeared , but the flow of foreign direct investment has not reached anywhere near the levels of China. Besides, infrastructure building has fallen far short of what is required. Even after three years of the enactment of the Electricity Act (2003), private investment in electricity generation is still a trickle with the states refusing to give up the monopoly of their electricity boards in the matter of purchase of the power generated. While swearing by growth, governments at both the centre and the states cite the fiscal responsibility laws to plead their helplessness in making the required investments to improve infrastructure.

Given this situation, the SEZs have apparently been thought of as a simple way out. In its enthusiasm for SEZs the commerce ministry forgot two critical lessons of the Chinese experience, viz., that an SEZ must be of an adequate size to provide opportunities for reaping the benefit of large-scale operations and their number should be few. Every industry or economic activity worth its name is now seeking SEZ status. Proposals are now being floated to invite foreign educational institutions to come to India with promises of SEZ treatment! The finance ministry apprehends a loss of nearly Rs. 1,75,000 crore in direct taxes, customs duties and excise duties over the next five years

question 1 : The objective of the author in writing the above passage seems to be to

Select one of the following:

  • highlight the failure of Indian policy makers regarding EPZs.

  • narrate the pros and cons of SEZs

  • compare between the Indian EPZs and Chinese SEZs

  • oppose the proliferation of SEZs in India

  • argue that India should imitate the Chinese policies regarding SEZs.

Question 2 of 4

Medal-premium 1

The idea of demarcating certain areas within the country as special economic zones to promote investment and growth is not new. A large country unable to provide the kind of facilities and environment that can attract foreign investment throughout the country often finds it feasible and attractive to carve up some of its areas where such facilities can be provided. The laws and procedures for setting up new industries are waived to make the area business-friendly with developed infrastructure and a one-window interaction with government. In addition, huge tax benefits are promised to lure investors. China’s experience shows that if chalked out and implemented with care such a policy can accelerate the flow of capital and technology from abroad and thereby speed up growth.

However, SEZs may not be the best option in all situations to clear the bottlenecks in growth. India’s experience with export processing zones (EPZs) bears this out. They have failed in India for the simple reason that the factors that made the SEZs successful in China have been absent here.

In India, as in China, EPZs were thought of as a way of providing an escape route from the stranglehold of control that prevailed over the Indian economy. But even while promising to ease the rigours of controls, Indian policy-makers could not give up their penchant for micromanaging from the centre and undoing the promised relaxations with all kinds of qualifications and “guidelines”.

Over last two decades India has evolved into a market economy and much of governmental control has disappeared , but the flow of foreign direct investment has not reached anywhere near the levels of China. Besides, infrastructure building has fallen far short of what is required. Even after three years of the enactment of the Electricity Act (2003), private investment in electricity generation is still a trickle with the states refusing to give up the monopoly of their electricity boards in the matter of purchase of the power generated. While swearing by growth, governments at both the centre and the states cite the fiscal responsibility laws to plead their helplessness in making the required investments to improve infrastructure.

Given this situation, the SEZs have apparently been thought of as a simple way out. In its enthusiasm for SEZs the commerce ministry forgot two critical lessons of the Chinese experience, viz., that an SEZ must be of an adequate size to provide opportunities for reaping the benefit of large-scale operations and their number should be few. Every industry or economic activity worth its name is now seeking SEZ status. Proposals are now being floated to invite foreign educational institutions to come to India with promises of SEZ treatment! The finance ministry apprehends a loss of nearly Rs. 1,75,000 crore in direct taxes, customs duties and excise duties over the next five years

question 2 : The author's arguments suggest the following conclusions, except

Select one of the following:

  • SEZs may be the best option for countries unable to provide infrastructure and business environment to attract foreign direct investment.

  • SEZs must be large enough to house large scale operations.

  • Fiscal responsibility laws actually limit the investment on infrastructure by the Government of India.

  • Government of India must limit the number of SEZs.

  • 5. SEZs cause loss of tax revenue for the central Government.

Question 3 of 4

Medal-premium 1

The idea of demarcating certain areas within the country as special economic zones to promote investment and growth is not new. A large country unable to provide the kind of facilities and environment that can attract foreign investment throughout the country often finds it feasible and attractive to carve up some of its areas where such facilities can be provided. The laws and procedures for setting up new industries are waived to make the area business-friendly with developed infrastructure and a one-window interaction with government. In addition, huge tax benefits are promised to lure investors. China’s experience shows that if chalked out and implemented with care such a policy can accelerate the flow of capital and technology from abroad and thereby speed up growth.

However, SEZs may not be the best option in all situations to clear the bottlenecks in growth. India’s experience with export processing zones (EPZs) bears this out. They have failed in India for the simple reason that the factors that made the SEZs successful in China have been absent here.

In India, as in China, EPZs were thought of as a way of providing an escape route from the stranglehold of control that prevailed over the Indian economy. But even while promising to ease the rigours of controls, Indian policy-makers could not give up their penchant for micromanaging from the centre and undoing the promised relaxations with all kinds of qualifications and “guidelines”.

Over last two decades India has evolved into a market economy and much of governmental control has disappeared , but the flow of foreign direct investment has not reached anywhere near the levels of China. Besides, infrastructure building has fallen far short of what is required. Even after three years of the enactment of the Electricity Act (2003), private investment in electricity generation is still a trickle with the states refusing to give up the monopoly of their electricity boards in the matter of purchase of the power generated. While swearing by growth, governments at both the centre and the states cite the fiscal responsibility laws to plead their helplessness in making the required investments to improve infrastructure.

Given this situation, the SEZs have apparently been thought of as a simple way out. In its enthusiasm for SEZs the commerce ministry forgot two critical lessons of the Chinese experience, viz., that an SEZ must be of an adequate size to provide opportunities for reaping the benefit of large-scale operations and their number should be few. Every industry or economic activity worth its name is now seeking SEZ status. Proposals are now being floated to invite foreign educational institutions to come to India with promises of SEZ treatment! The finance ministry apprehends a loss of nearly Rs. 1,75,000 crore in direct taxes, customs duties and excise duties over the next five years

question 3 : The author does not oppose

Select one of the following:

  • SEZ treatment of foreign educational institutes in India.

  • qualifiers undoing relaxation of government control.

  • tax benefits to strategically promote SEZs.

  • monopoly of state electricity boards in power purchase.

  • lack of Government initiative in infrastructure development.

Question 4 of 4

Medal-premium 1

The idea of demarcating certain areas within the country as special economic zones to promote investment and growth is not new. A large country unable to provide the kind of facilities and environment that can attract foreign investment throughout the country often finds it feasible and attractive to carve up some of its areas where such facilities can be provided. The laws and procedures for setting up new industries are waived to make the area business-friendly with developed infrastructure and a one-window interaction with government. In addition, huge tax benefits are promised to lure investors. China’s experience shows that if chalked out and implemented with care such a policy can accelerate the flow of capital and technology from abroad and thereby speed up growth.

However, SEZs may not be the best option in all situations to clear the bottlenecks in growth. India’s experience with export processing zones (EPZs) bears this out. They have failed in India for the simple reason that the factors that made the SEZs successful in China have been absent here.

In India, as in China, EPZs were thought of as a way of providing an escape route from the stranglehold of control that prevailed over the Indian economy. But even while promising to ease the rigours of controls, Indian policy-makers could not give up their penchant for micromanaging from the centre and undoing the promised relaxations with all kinds of qualifications and “guidelines”.

Over last two decades India has evolved into a market economy and much of governmental control has disappeared , but the flow of foreign direct investment has not reached anywhere near the levels of China. Besides, infrastructure building has fallen far short of what is required. Even after three years of the enactment of the Electricity Act (2003), private investment in electricity generation is still a trickle with the states refusing to give up the monopoly of their electricity boards in the matter of purchase of the power generated. While swearing by growth, governments at both the centre and the states cite the fiscal responsibility laws to plead their helplessness in making the required investments to improve infrastructure.

Given this situation, the SEZs have apparently been thought of as a simple way out. In its enthusiasm for SEZs the commerce ministry forgot two critical lessons of the Chinese experience, viz., that an SEZ must be of an adequate size to provide opportunities for reaping the benefit of large-scale operations and their number should be few. Every industry or economic activity worth its name is now seeking SEZ status. Proposals are now being floated to invite foreign educational institutions to come to India with promises of SEZ treatment! The finance ministry apprehends a loss of nearly Rs. 1,75,000 crore in direct taxes, customs duties and excise duties over the next five years.

question 4 : The passage was most likely written in the year:

Select one of the following:

  • 1991

  • 2001

  • 2003

  • 2006

  • 2011

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Reading compresion test

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