IBPS PO 2011

Read the following passage carefully and answer the question given below it.

Certain words are printed in bold to help you locate them while answering some of the questions.

In a reversal of the norm elsewhere, in India policymakers and economists have become optimists while bosses do the worrying. The country's Central Bank has predicted that the country's economy is likely to grow at a double-digit rate during the next 20-30 years. India had the capability with its vast labour and lauded entrepreneurial spirit. But the private sector, which is supposed to do the heavy lifting that turns India from the world's tenth largest economy to its third largest by 2030, has become fed up.

Business people often carp about India's problems but their irritation this time has a nervous edge. In the first quarter of 2011, GDP grew at an annual rate of 7.8 percent; in 2005-07, it managed 9-10 percent. The economy may be slowing naturally as the low-interest rates and public spending that got India through the global crisis are belatedly being withdrawn. At the same time, the surge in inflation caused by exorbitant food prices has spread more widely, casting doubt over whether India can grow at 8-10 percent in the medium term without overheating.

In India, as in many fast-growing nations, the confidence to invest depends on the conviction that the long-term trajectory is intact, and it is that which is in doubt. Big Indian firms too. Sometimes, seem happier to invest abroad than at home, in deals that are often hailed as symbols of the country's growing clout but sometimes speak to its weaknesses—purchases of natural resources that India has in abundance but struggles to get out of the ground. In fact, a further dip in investment could be self- fulfilling: if fewer roads, ports and factories are built, this will hurt both short-term growth figures and reduce the economy's long-term capacity.

There is a view that because a fair amount of growth is assured the government need not try very hard. The liberalisation that began in 1991 freed markets for products and gave rise to vibrant competition. At the same time what economists call factor markets, those for basic inputs like land, power, labour, etc., remains unreformed and largely under state control, which creates difficulties. Clearances today can take three to four years, and many employers are keen to replace workers with machines despite an abundance of a labour force. This can be attributed to labour laws that are inimical to employee creation and an education system that means finding quality manpower a major problem. In fact, the Planning Commission concluded that achieving even nine per cent growth will need marked policy action in unreformed sectors. Twenty years ago it was said that the yardstick against which India should be measured was its potential, and it is clear that there remains much to do.

Directions : Read the following passage carefully and answer the questions given below it.

In many countries, a combustible mixture of authoritarianism, unemployment and youth has given rise to disaffection with strongmen rulers, which has, in turn, spilled over into uprisings. Young people in these countries are far better educated than their parents were. In 1990, the average Egyptian had 4.4 years of schooling; by 2010, the figure had risen to 7.1 years. Could it be that education, by making people less willing to put up with restrictions on freedom and more willing to question authority, promotes democratisation? Ideas about the links between education, income and democracy are at the heart of what social scientists have long studied. Since then plenty of economists and political scientists have looked for statistical evidence of a causal link between education and democratisation. Many have pointed to the strong correlation that exists between levels of education and measures like the pluralism of party politics and the existence of civil liberties. The patterns are similar when income and democracy are considered. There are outliers, of course—until recently, many Arab countries managed to combine energy-based wealth and decent education with undemocratic political systems. But some deduce from the overall picture that as China and other authoritarian states get more educated and richer, their people will agitate for greater political freedom, culminating in a shift to a more democratic form of government.

This apparently reasonable intuition is shakier than it seems. Critics of the hypothesis point out that correlation is hardly causation. The general trend over the past half-century may have been towards rising living standards, a wider spread of basic education and more democracy, but it is entirely possible that this is being driven by another variable. Even if the correlation were not spurious, it would be difficult to know which way causation ran. Does more education lead to greater democracy? Or are more democratic countries better at educating their citizens? A recent NBER paper compared a group of Kenyan girls in 69 primary schools whose students were randomly selected to receive a scholarship with similar students in schools which received no such financial aid. Previous studies had shown that the scholarship programme led to higher test scores and increased the likelihood that girls enrolled in secondary school. Overall, it significantly increased the amount of education obtained. For the new study, the authors tried to see how the extra schooling had affected the political and social attitudes of the women in question. Findings suggested that education may make people more interested in improving their own fives but they may not necessarily see democracy as the way to do it. Even in established democracies, more education does not always mean either more active political participation or greater faith in democracy. Poorer and less educated people often vote in larger numbers than their more educated compatriots, who often express disdain for the messiness of democracy, yearning for the kind of government that would deal strongly with the corrupt and build highways, railway fines and bridges at a dizzying pace of authoritarian China.