BANKING Content

RBI Grade B 2008

Instructions

Below are given two passage followed by several possible inferences which can be drawn from the facts stated in the passages. You have to examine each inference separately in the context of the each passage and decide upon its degree of truth or falsity.

Mark answer (1) if the inference is “definitely true” i.e. it properly follows from the statement of facts given.
Mark answer (2) if the inference is “probably true” though not “definitely true” in the light of the facts given.
Mark answer (3) if the data are inadequate i.e. from the facts given you cannot say whether the inference is likely to be true or false.
Mark answer (4) if the inference is “probably false” though not “definitely false” in the light of the facts given.
Mark answer (5) if the inference is “definitely false” i.e. it cannot possibly be drawn from the facts given or it contradicts the given facts.

Passage-I
The immediate challenge is on the food front. Shortfalls in production have been allowed to affect supplies and hence prices. The Government is planning to focus on investment in irrigation and even revival of agricultural extension system what is probably needed is a fresh dose of Green Revolution strategy. It appears that the Green Revolution instruments to encourage farmers to invest are no longer effective. The Green Revolution strategy was based on the state taking out the risk of collapse in prices. Farmers were offered remunerative prices and a
guaranteed procurement of their produce in case the open market could not absorb it. Farmers could then borrow from banks, acquire the Green Revolution Technology and produce as much as they could. The pressure on the food subsidy was manageable as long as there was a food shortage. Prices in the open market then tended to be above the procurement prices. But with the food surpluses the situation has changed. The situation was unsustainable not merely because of the magnitude of this subsidy. It was also inefficient. It meant farmers were being led to produce crops based just on the prices Government fixed and not in relation to any real demand. In these circumstances, the Government was reluctant to keep increasing procurement prices at the pace that used to be the norm in earlier years.

Question 191

The Government is planning to make crucial changes in the Green Revolution strategies.

Question 192

The Government is no longer in a position to provide subsidy to farmers.

Question 193

As the open market prices are lower, all the burden of procurement of crops is on the Government.

Question 194

Demand is much higher than the quantity of crops produced by the farmers.

Question 195

The farmers tend to produce the crops as per their convenience and not consonant with the demand.


Instructions

One of the promising features of the current market is that domestic institutions seem to have turned buyers after a very long time. They have been net buyers this month with inflows exceeding by Rs. 80 crore till early this month. That admittedly a small amount, but its significance lies in the fact that domestic institutions have been net sellers every month this financial year except in September when their net purchases amounted to a microscopic Rs. 28 crore. This financial year's net sales by domestic institutions amounted to Rs. 2964 crore, which has substantially offset the net inflows of Rs. 3187 crore by FIIs. The net purchases by domestic institutions could indicate that money is once again owing into equity funds, eager not to miss the widely expected rally. Part of this reason could be a shift in investor portfolios, as people lighten up on debt and put that money into equity.

Question 196

Domestic institutions have been consistently selling only in all the months in this financial year.

Question 197

FIIs bought more than what was sold by domestic institutions this financial year.

Question 198

The equity market is expected to experience a subdued activity in near future.

Question 199

The activities in equity market has direct relationship with the debt market.

Question 200

It is expected that in the early next financial year the gap between the net sales and net purchases will reduce substantially.

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