97 B English Passage 18 Feb

Passage I

Read below given statements 

1. It is desirable that the impact of Foreign Direct Investment should be pro-competitive.

2. The entry of foreign investors invariably leads to the inflated prices in domestic markets.

Read below given Passage 

1.The need for Competition Law becomes more  evident when foreign direct investment (FDI) is liberalized.

2.The impact of FDI is not always pro- competitive.

3.Very often FDI takes the form of a foreign corporation acquiring a domestic enterprise or establishing a joint venture with one.

4.  By making such an acquisition the foreign investor may substantially lessen competition and gain a dominant position in the relevant market, thus charging higher prices.

 5. Another scenario is where the affiliates of two separate multinational companies (MNCs) have been established in competition with one another in a particular developing economy, following the liberalization of FDI.

6. Subsequently, the parent companies overseas merge. 

7. With the affiliates no longer remaining independent, competition in the host country may be virtually eliminated and the prices of the products may be artificially inflated. 

8. Most of these adverse consequences of mergers and acquisitions by MNCs can be avoided if an effective competition law is in place.9.  Also, an economy that has implemented an effective competition law is in a better position to attract FDI than one that has not. 

9. This is not just because most MNCs are expected to be accustomed to the operation of such a law in their home countries and know how to deal with such concerns but also that MNCs expect competition authorities to ensure a level playing field between domestic and foreign firms.

Qts I. With reference to the passage, consider the following statements :

1. It is desirable that the impact of Foreign Direct Investment should be pro-competitive.

2. The entry of foreign investors invariably leads to the inflated prices in domestic markets.

Which of the statements given above is/are correct?

(a) 1 only

(b) 2 only

(d) Neither 1 nor 2

(c) Both 1 and 2

Ans. A

Explanation

Due to heavy inflow of FDI, foreign investors gain a dominant position in the local market making it very tough for the local companies to compete with them. 

Hence, an effective competitive law is necessary to reduce the adverse effect of  FDI. 

But the entry of foreign investors does not invariably lead to inflated prices in the domestic market.

 Hence, statement 2 is not correct.

 

Passage-II

Read below given statements 

1. empowerment.

2. increased agricultural productivity.

3. safeguard against exploitative markets.

4. surplus production of agricultural commodities.

Read below given passage 

1.The poor especially in market economies, need the strength that collectivities offer for creating more economic, social and political space for themselves, for enhancing their socio-economic well-being and voice, and as a protection against free market individualism.

 2.It has been argued that a group approach to farming, especially in the form of bottom up agricultural production collectivities, offers substantial scope for poverty alleviation and empowering the poor as well as enhancing agricultural productivity. 

3.To realise this potential, however, the groups would need to be voluntary in nature, small in size, participative in decision making and equitable in work sharing and benefit distribution. 

4.There are many notable examples of such collectivities to be found in varied contexts, such as in the transition economies. 

5.All of them bear witness to the possibility of successful cooperation under given conditions. 

6. And although the gender impact of the family cooperatives in the transition economies are uncertain, the Indian examples of women only groups farming offer considerable potential for benefiting women.

Qts I. Agricultural collectivities such as group based farming can provide the rural poor

1. empowerment.

2. increased agricultural productivity.

3. safeguard against exploitative markets.

4. surplus production of agricultural commodities.

Select the correct answer using the codes given below:

(a) 1, 2, 3 and 4

(b) 1, 2 and 3 only

(c) 2 and 4 only

(d) 1, 3 and 4 only

Ans. B

Explanation

Referring to the lines "It has been argued agricultural productivity", (b) is the correct answer. But, it does not mean that surplus production can be attained through group farming. Hence statement (4) is wrong.