TARGET SBI PO : ENGLISH DAY 32

TARGET SBI PO : ENGLISH DAY 32

Directions (1-10): Read the following passage carefully and answer these questions given below it. Certain words/phrases have been printed in BOLD to help you locate them while answering some of the questions.

Divestment of public sector units (PSUs) through offer for sale route is one area where the performance of all governments, irrespective of party, had been below par. While the divestment process began in 1991-92, it is only in the last 14 years that strategic sales of PSUs has became a tool for the government to raise resources for meeting fiscal targets. There are numerous instances where public sector banks and insurances companies have salvaged the offer for sale of PSUs. They were asked, at the last minute, to put in large applications for subscription so that the offer for sale is able to go through, essentially making divestment an accounting entry, rather than a real money raising exercise. The time has come for the government to overhaul its divestment strategies. Some laws, which govern the divestment process, are plainly outdated. They were put into place in 1992 when the Indian equity markets were dominated by a handful of local institutional investors and a few individuals. Yes, some changes were introduced in 2004, but since then, the eco system that governs the Indian market has changed. At that time, for instance, there was hardly any global sectoral investment in India. Today, there are at least 200 global sectoral funds in search of sectoral themes for investing. First, the government needs to change its thought process, which dictates that equity markets have an obligation to do what the government wants them to do.

In the last couple of years, the government has come out with offers for sale from the oil and power sector at a time when both sectors were reeling under pressure, some of which were dictated by the nature of the business and some that occurred due to lack of clarity in policies. In the process, family silver was sold at the price of copper. Today, when things are looking up and the petroleum marketing and refining sector and their stocks are doing extremely well as they touch all-time high, the government does not offer additional shares to the market as it’s holding in three main oil marketing and companies is between 51 to 59 per cent and it hardly can afford to bring it down any lower. The government needs to bring in professionals who are able to anticipate what trend is likely to emerge in equity markets and prepare the divestment plan accordingly and not as per norms of the old bureaucratic set up, which are highly inflexible. After all, if the government can appoint a private sector person to head a PSU bank, why can’t an experienced merchant or investment banker be at the helm of department of divestment? Secondly, the government needs to introduce fresh companies for strategic sales and should not always depend on already-listed firms and their offer for sale for raising resources. Today, the Indian defence sector is standing at the cusp of big change and there is demand for paper from companies, which are related to defence. This can be gauged by the performance of defence-related stocks — the mere mention of a company slated to get a defence-related order, is enough to add couple of millions to its market capitalisation. The government has many unlisted PSU companies in defence-related areas. It can come out with their initial public offering (IPO) and raise genuine money from investors. The whole notion that defence-related companies are listed and would be tantamount to kind of compromise on their working, is plainly absurd.-

1.Identify the word which is most opposite in meaning

INFLEXIBLE

(a) Compliant

(b) Capital

(c) Intransigent

(d) Fallacious

(e)None of the above.

2. Identify the word which is most opposite in meaning

SALVAGE

(a) Rescue

(b) Destroy

(c) Change

(d) Appease

(e)None of the above.

3. Identify the word which is most similar in meaning

ANTICIPATE

(a) Initiate

(b) Analyse

(c) Expect

(d) Expand

(e)None of the above.

4. Identify the word which is most similar in meaning

 SLATED

(a) Poised

(b) Prepared

(c) Delayed

(d) Proved

(e)None of the above.

5. Which of the following opinions is correct according to the writer

(a) Governments of all ruling parties Since 1991-92 have successfully divested  shares of PSU

(b) Divestment of oil and power sector units is yet to take place

(c) Certain laws governing divestment process are old and outdated

(d) Govt should appoint an experienced bureaucrat to head the department of Disinvestment

(e) None of the above.

6. Which of the following can be a suitable title for the passage

(a) Sale of public sector units

(b) Expansion of P.S.U. s

(c) Divestment Reforms / Strategy

(d) Govt plans

(e)None of the above.

7. In what context does the writer see a need for change in the Disinvestment policy

(a) Equity markets are not obliged to do what the Govt dictates

(b) Oil marketing companies hold their own shares only to the extent of 51-59%

(c) Professionals from private sector are willing to get involved in Disinvestment strategy.

(d) Public sector units require capital infusion

(e)None of the above.

8. Which among the following is suggested by the writer for revamping disinvestment policy?

(I)  recruit a suitable person from the private sector to head the disinvestment department.

(II) Unlisted PSU units dealing in defence oriented products should be disinvested.

(III) Additional shares in petroleum marketing and refining sector should be offered to the public

(IV) The Govt should take steps to disinvest shares from power sector to reach fiscal targets.

(a)I & II

(b) II & III

(c) I, II & III

(d) I & IV

(e) None of the above

9. Which of the following is not true as per the passage?

(a) Since 2004, the ecosystem that governs the Indian markets has changed

(b) The Government must wait for another five years before overhauling its divestment strategies

(c) It is only in the last 14 years that a strategic sale of PSUs has become a tool for the Government to raise resources for meeting fiscal targets.

(d) The Government has many unlisted PSU companies in defence related areas.

(e)None of the above.

10. The norms of the old bureaucratic setup are

(a) Rigid and can’t be modified as per the situation

(b) Suitable even in the present scenario

(c) Easy to adhere to

(d) Better than preparing new disinvestment plans.

(e) None of the above.

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