Comprehension For SBI PO Set – 28

We are well into the 21st century yet half the world’s population live in squatter settlements and work in shadow economies, which generate more than one-third of the developing world’s GDP. Slums are not caused by the poor but by governments denying people the right to own and exchange property. When people own their own property they have incentives to invest in time, money and energy to improve it because they know that they will be able to benefit from any such improvements. ie the ability to obtain mortgages etc. In short, property rights beget capital, which begets innovation, which begets wealth. Sadly, the poor typically don’t have secure title to their land as there are bureaucratic restrictions on transferring title or there is no clear system for titling. Without legal deeds they live in constant fear of being evicted by landlords or municipal officials. Illiteracy is a major reason poor people often choose not to seek the protection of local courts since in so many countries laws established under colonial rule have never been translated into local languages. When entrepreneurs do set out to legally register business they are discouraged by red tape and costly fees. In Egypt, starting a bakery takes 500 days, compliance with 315 laws and 27 times the monthly minimum wage. The proprietors of such business cannot get loans, enforce contracts or expand a personal network of familiar customers and partners. As a result the poor have no choice but to accept insecurity and instability as a way of life.

In India severe restrictions on free transfer of property in most rural areas inhibit investment and encourage urban flight. Planning policies however discourage building homes for these migrants as numerous homes are destroyed if they do not comply with planning rules, essentially forcing people to live in slums and perversely blaming it on population growth. UN Habitat, the UN agency for housing the poor, has implemented more plans to stabilize the unplanned aspects of urban growth but grandiose plans like UN schemes and governments housing projects simply ignore or worsen the underlying problems. It is when governments grant people legal means to control their assets that they empower them to invest and plan ahead. In Buenos Aires, economists studied the experience of two Argentine communities. One had received legal title to its land in the 1980s and surpassed the other group which had not, in a range of social indicators including quality of house construction and education levels. The commission on Legal Empowerment of the poor- a UN – afflicted initiative made up of two dozen leaders- is exploring ideas to extend enforceable legal; rights to impoverishment members of society and is seeking to bring about a consensus on incentives for national and local leaders. As the growth of illegal settlement amply demonstrates, the poor are not helpless, all they need is governments to grant them fundamental human rights of freedom and responsibility.

1. What did Argentine study indicate?

(A) Argentina’s economy is booming and the percentage of poor has fallen.

(B) when the government gives the legal means to control their assets they plan for the future.

(C) The government succeeded in widening the gap between the rich and poor.

(a) Only A

(b) Both A and B

(c) Only B

(d) All A, B and C

(e) None of these

2. According to the author, which of the following factors is responsible for the creation of a slum?

(a) Migration of landless labourers to cities.

(b) Municipal authorities building low-cost housing for the poor.

(c) Unchecked population growth.

(d) Government failure to secure property rights for citizens.

(e) Exorbitant cost of living in cities.

3. The author’s main objective in writing the passage is to

(a) exhort the UN to play a greater role in rehabilitation slum-dwellers.

(b) praise government initiatives fro migrant

(c) convince governments to empower the poor.

(d) enlist the aid of developed countries to tackle the issue of slums

(e) chastise slum-dwellers for illegal activities that they engage in.

4. What benefit does the author see in providing land ownership rights to the poor?

(a) Steady increase in GPD

(b) Gaining independence from colonial rulers

(c) Municipal services afforded to the poor will improve.

(d) It will be an inheritance for future generations.

(e) None of these.

5. Which of the following is TRUE in the context of the passage?

(a) Additional UN projects will exacerbated the plight of slum-dwellers.

(b) Although the government allocates land for them the poor choose not to invest in building houses.

(c) With the spread of slums populations are drifting back to rural areas.

(d) In order to accumulate profit slum-dwellers avoid legally registering their business.

(e) UN has declared the right to housing as a fundamental right.

6. What impact do planning policies have on the development of slums?

(a) They encourage the poor to invest in land thereby perpetuating slums.

(b) They focus on developing rural rather than urban areas so people have to live in slums.

(c) They offer alternative practical suggestions for construction of low-cost housing.

(d) They advocate demolishing homes which violate planning rules, encouraging slums.

(e) None of these.

7. What is the objective of the Commission on Legal Empowerment of the Poor?

(a) Coerce international leaders to implement housing project.

(b) Bring sanctions against countries denying their citizens the right to housing

(c) Selecting experts to recommend ideas to do away with poverty.

(d) Establish practical ways for government to empower the underprivileged.

(e) None of these.

8. Which of the following difficulties do unregistered businesses face?

(A) Banks do not give loans in the absence security.

(B) They are unable to earn the loyalty of any customer.

(C) They cannot enforce contracts.

(a) Only A

(b) Both A and C

(c) Both A and B

(d) Only B

(e) None of these

9. What does the growth of illegal settlements indicate?

(a) The government needs to implement more restrictions on property transfer.

(b) Capital earned from underground economies is beneficial to a country’s economy.

(c) The poor are capable of investing resources in their development.

(d) UN housing projects are not properly implemented.

(e) None of these

10. Which of the following prevents the poor from obtaining a business license?

(a) They do not want to make an effort.

(b) Government officials are discourteous.

(c) They lack funds to bribe government officials.

(d) They do now want to pay taxes.

(e) They are intimidated by bureaucratic procedures.

Directions (Q. 11-13): Choose the word which is most nearly the SAME in meanings as the word printed in bold as used in the passage.


(a) Acute

(b) dangerous

(c) bad

(d) flexible

(e) demanding


(a) lead

(b) produce

(c) happens

(d) effect

(e) result


(a) excel

(b) matched

(c) outshone

(d) won

(e) competed

Directions (Q. 14-15): Choose the word which is most OPPOSITE in meaning of the word printed in bold as used in the passage.


(a) reasonably

(b) stubbornly

(c) conveniently

(d) formally

(e) helpfully


(a) insecure

(b) fixed

(c) weaken

(d) unsure

(e) unreliable

Answer key:

1. (c) 2. (d) 3. (c) 4. (e) 5. (b) 6. (a) 7. (d) 8. (b) 9. (c) 10. (e) 11. (a) 12. (b) 13. (c) 14. (a) 15. (a)