CMAT 2026 Previous Year Paper

Externalities are costs or benefits arising from economic activity (production or consumption) that affect third parties who did not choose to be involved. Hence, social or environmental spillover effects can be termed as externalities.

Ex ante analysis involves forecasting future synergies—such as cost savings from shared resources or revenue growth from cross-selling—before a merger or project begins.

Startups face intense margin pressures due to rising production costs and fierce competition, forcing them to focus on optimising gross and operating margins.

To combat this, they leverage synergies through strategic partnerships, collaborative ecosystems, and resource sharing.

The Department for Promotion of Industry and Internal Trade (DPIIT), under the Ministry of Commerce and Industry, drives India's entrepreneurship policy primarily through the Startup India initiative launched in 2016.

Avoidance refers to the tendency to skip or ignore certain aspects to create a sense of comfort.

Resilience refers to quickly recovering from setbacks and getting into action mode; hence, it is the correct choice.

Agility refers to the ability to adjust, move or think quickly.

Leadership involves motivating and guiding individuals toward a common goal.

Bootstrapping refers to launching and growing a business or project using only personal savings and operating revenue, without relying on external funding like venture capital or bank loans. It signifies self-sufficiency, financial discipline, and the retention of full control. Hence, it indicates financial discipline and validates the business before external funding.

It decreases the control dilution, so A is incorrect.

Bootstrapping is unrelated to accounting standards.

Bootstrapping does not directly facilitate negotiation.

Make in India refers to the country’s focus on domestic manufacturing and the related incentives.

Launched by Prime Minister Narendra Modi on September 25, 2014, Make in India is a major national initiative aimed at transforming India into a global design and manufacturing hub. The initiative aims to boost the manufacturing sector's contribution to GDP to 25%, create 100 million additional jobs, and encourage both domestic and foreign companies to produce in India.

Let’s understand the essence of the sentence to fill in the blanks. Ambidexterity refers to the ability to perform two different tasks simultaneously. Therefore, we can assess that the sentence must be talking about doing two different things simultaneously.

Option B fits best here, exploring new opportunities while exploiting existing resources.

Option A: Human resources is not a good fit.

Market opportunities and exploiting natural resources is not something that a theory would recommend.

To maximise returns, diversification is recommended, as it balances risk and exposure, whereas specialising in a narrow sector can increase risk and reduce returns.

So statement 1 is incorrect.

Diversification across industries and stages helps manage risk and returns, which is correct.

The Atal Innovation Mission (AIM) provides extensive support for establishing and upgrading world-class incubators, offering up to INR 10 Crores in grant-in-aid over 3-5 years for capital and operational expenses. Key initiatives include Atal Incubation Centres (AICs) for new setups and Scale-up support for existing ones, aimed at fostering sector-specific startups in areas such as health, clean tech, and AI.

The SIDBI SMILE (Soft Loan Fund for Micro, Small, and Medium Enterprises) scheme supports MSMEs in manufacturing and service sectors, with a strong focus on 25 "Make in India" sectors. It targets new startups and existing businesses for expansion, modernisation, technology upgrades, and equipment finance.

It is for new and small businesses, so there is no focus on industrialisation or export prospects, and high collateral security is not expected, as these are not extremely capital-intensive loans. The SMILE scheme offers quasi-loans.

Entrepreneurial Orientation (EO) refers to the strategy-making processes, methods, and practices that companies use to act entrepreneurially, focusing on innovation, risk-taking, and proactiveness to create competitive advantages.

Managerial efficiency is a quality specific to managers.

Strategic intention refers to the intent to deploy a strategy to the tasks at hand.

Innovative cognition refers to the application of fundamental mental processes (such as memory retrieval, conceptual combination, and analogical thinking) to existing knowledge structures in order to generate new, original, and valuable ideas or products.

Hence, entrepreneurial orientation is the right choice.