“20-20” English Question | Crack SBI PO 2018 Day-160

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Direction (1-10): Read the following passage carefully and answer the questions given below it.

We now have a peculiar combination in the economic policy of India, a declared attempt at fiscal consolidation, combined with a reluctance to do what it takes to raise tax revenues. This unfortunate juxtaposition has meant a squeeze on Central government expenditures, and particularly those relating to social spending that directly affects most people in the country. Despite various signs of economic slowdown such as languishing industrial production and adverse effects of the drought on rural livelihoods and demand, the government is apparently unable or unwilling to increase public spending to mitigate people’s material distress or to kick-start economic activity to increase employment. Whenever demands are made for such spending to be increased which is also required to fulfill the government’s obligations for meeting the social and economic rights of citizens the official response is that there just isn’t enough money in the public coffers to do this. Increases in such spending will therefore cause the fiscal deficit to increase, which is seen as unacceptable not because of the inflationary implications but because it will send a wrong signal to global investors and therefore affect future investment and growth. Obviously, if fiscal deficit targets are sought to be maintained, the only way to provide the necessary increases in public spending is to increase government revenues, and tax revenues in particular provide the obvious mechanism. India already has one of the lowest tax-to-GDP ratios among the G20 countries in fact, only Mexico and Indonesia perform as poorly. This is not just because India’s per capita income is still relatively low; many countries that are even lower in the income ladder show higher ratios. At around 18 per cent the tax-to-GDP ratio in India is lower than several Sub-Saharan African countries and significantly below China.

New data from the Ministry of Finance give us a sense of how tax revenues and particularly direct taxes have moved in recent years. The first disturbing trend is that the tax-to-GDP ratio has barely increased over the years of the economic boom, unlike the expected pattern whereby it increases as incomes rise. More worryingly, there is a greater reliance on indirect taxes, which are inherently more regressive because they fall disproportionately on the poor. In fact, the perception among the elites and middle classes that they are the only ones who pay tax is hugely misplaced: it is possible for tax incidence to be even higher among the poor than the rich. Because the poor tend to spend nearly all of their income, they end up paying substantial amounts of taxes in the form of excise duties, sales taxes and import tariffs that are reflected in higher prices. By contrast, the rich do not spend all of their income, and they are able to utilise various tax incentives provided to savers and producers to reduce their tax burden. In 2014-15, nominal GDP increased by 10.5 per cent but direct tax collections increased by less than 9 percent. In 2015-16, nominal GDP increased by 8.2 per cent but direct taxes increased by only 6.7 per cent. In that same year, indirect taxes increased by a whopping 31 per cent, as the government chose to grab all benefits of the lower global oil prices through successive increase in petroleum product duties. So, increasingly, the poor have been paying to provide revenues for the Central government. This is also because the tax system provides many tax breaks and incentives to rich individuals and companies that allow them to avoid paying the full tax rate.

Corporate taxes have not increased as they should have along with corporate profits. Although the statutory rate of taxation for companies is 33.84 per cent, the average tax rate actually paid in 2014-15 was only 24.64 per cent. The larger the companies the lower the effective tax rates: companies that had profits of less than Rs.1 crore paid taxes at 29.37 per cent, but those with profits in excess of Rs.500 crore paid only 22.88 per cent. Public sector companies had a higher tax rate than private sector companies. This system creates some bizarre anomalies. Indeed, the Budget documents provide estimates of the revenues foregone through various tax concessions that are explicit and legal. In the past two years these have amounted to as much as 4.5 per cent of GDP significantly higher than the declared fiscal deficit. Personal income tax collection is similarly inadequate. The data show that the number of individual tax assessees was only 48.6 million in 2014-15, just 6 per cent of the estimated adult population of around 800 million in that year. Many of these assessees do not actually pay any income tax; in fact, data for 2012-13 suggest that around 2 million taxpayers accounted for the bulk of the personal income tax collections. Only Rs.35,754 crore was spent on the Mahatma Gandhi National Rural Employment Guarantee Scheme, which could benefit several hundred million rural people if only it were to be taken seriously. The Integrated Child Development Services got only Rs.15,394 crore, while maternal and infant health and nutrition indicators remain appalling in most of India. School education got only Rs.42,187 crore even though government schooling is woefully inadequate in terms of both quantity and quality. The low and declining rates of direct taxation are therefore an indication of the political choices of the government.

1) According to the passage why only the poor end up paying increasingly to the Central government?

1. Because the tax system issue many tax breaks to rich individuals
2. Because the tax system extend incentives to companies that allow them to avoid paying the full tax rate.
3.  Because of the low and declining rates of direct taxation

a) ii and iii

b) i and ii

c) i and iii

d) Only i

e) None of these

2) According to the passage which of the following is the way to provide the necessary increases in public spending?

1. By lowering tax-to-GDP ratio
2. By increasing government revenues
3.  By curtailing direct taxes collections

a) Only i

b) Only iii

c) ii and iii

d) Only ii

e) None of these

3) According to the passage why the indirect taxes were increased by a whopping 31% in 2015-16?

1. Because of the government forbearance regarding illegal tax-avoidance mechanisms
2. Because of the unchecked tax concessions that were explicit and illegal
3. Because the government chose to take hold of all benefits of the lower global oil prices.

a) Only ii

b) i and ii

c) Only iii

d) ii and iii

e) None of these

4) Which of the following is not true in the context of the passage?

1. The larger the companies the higher the effective tax rates.
2. Mahatma Gandhi National Rural Employment Guarantee Scheme got Rs.35,754 crore for its upliftment
3.  In 2015-16, nominal GDP was increased by 10.5 per cent

a) i and iii

b) ii and iii

c) i and ii

d) Only iii

e) None of these

5) Which of the following statements have been mentioned correct regarding tax-to-GDP ratio?

1. In the past years tax-to-GDP ratio has amounted to as much as 4.5 per cent significantly higher than the declared fiscal deficit
2. At around 18% the tax-to-GDP ratio in India is lower than several Sub-Saharan African countries
3.  The tax-to-GDP ratio has barely increased over the years of the economic boom, unlike the expected pattern whereby it increases as incomes rise.

a) i and ii

b) ii and iii

c) Only ii

d) i and iii

e) All are correct

6) Which of the following is true in the context of the passage?

1. Public sector companies had a lower tax rate than private sector companies.
2. In 2014-15, direct tax collections increased by less than 9 per cent
3.  School education got only Rs.42,187 crore even though government schooling is woefully inadequate in terms of both quantity and quality

a) i and iii

b) i and ii

c) Only iii

d) ii and iii

e) All are true

7) Choose the word which is most nearly the same in meaning as the word “appalling” printed in bold as used in the passage.

a) Invigorating

b) Assuaging

c) Atrocious

d) Consolatory

e) Analeptic

8) Choose the word which is most nearly the same in meaning as the word “languishing” printed in bold as used in the passage.

a) Repining

b) Sprouting

c) Pullulating

d) Maturating

e) Mounting

9) Choose the word which is most opposite in meaning of the word “regressive” in bold as used in the passage

a) Austere

b) Lenient

c) Intransigent

d) Chiseled

e) Adamant

10) Choose the word which is most opposite in meaning of the word “juxtaposition” in bold as used in the passage

a) Abutment

b) Proximity

c) Contiguity

d) Concurrence

e) Purview

Directions (11-15): In each of the following questions on phrase has been given and it has been followed by four sentences. You have to find out on which sentences phrase has been used properly according to its meaning and mark your answer from the options denoted a), b), c), d) Mark e) as your answer of you find that the phrase has been applied properly in all sentences

11) Fob off

1. Some car dealers are always trying to fob something off.
2. The landlord fobbed off the tenants’ complaints for another month.
3.  I’ve asked her about it but she fobs me off.
4. Don’t be fobbed off with excuses

a) ii and iii

b) i and iv

c) i and ii

d) All except iv

e) All are correct

12) Stick at

1. You’ll never learn to play the piano if you’re not going to stick at it.
2. He doesn’t seem to be able to stick at anything for very long.
3.  I will stick it at as long as I can.
4. She’s never stuck at one job for more than six months.

a) iii and iv

b) i and iii

c) i and ii

d) All except iii

e) All are correct

13) Lead up to

1. A narrow path led up to the door of the cottage.
2. The coach led up to Walter as pitcher and Sam on first base
3. They had a series of arguments, leading up to a decision to separate.
4. We will lead up to our best players.

a) i and ii

b) iii and iv

c) i and iii

d) ii and iv

e) All are correct

14) Fold into

1. He folded the paper into a little bird
2. Carefully, the chef folded the eggs into the other ingredients.
3. The table just folded into with no warning, trapping my leg.
4. She folded into when she heard the news.

a) ii and iv

b) i and iii

c) iii and iv

d) i and ii

e) All are correct

15) Make for

1. He could make for a ship in the distance
2. After he left the office he made straight for home
3.  I made for the life raft and hung on for dear life
4. The doctor made out for a prescription.

a) iii and iv

b) ii and iii

c) i and iv

d) All except i

e) All are correct

Direction (16-20): Below ten sentences have been given. Each sentence has been divided in five part denoted by a, b, c, d and e. read the sentence and find out the grammatical error in it. The code of that part of sentence will be your answer. If you find no error in sentence then mark e as your answer

16) The officials cited some instances in this context, a)/searches were carried of against prominent b)/ PWD contractors in poll-bound Karnataka, c)/who were awarded contracts during January-March d)/no error e)/

a) a

b) b

c) c

d) d

e) e

17) AFSPA was extended in Nagaland by six months from January a)/, there is no sign that the vigour of the b)/ law will be diluted, but the area of its use c)/ may be progressive curtailed over time d)/ no error e)/

a) a

b) b

c) c

d) d

e) e

18) Conventionally, a riot had a short sequence followed by a)/a almost surprising return to normalcy b)/where rioter and victim played neighbours again, the new c)/ riots have raised a different spectre of violence d)/ no error e)/

a) a

b) b

c) c

d) d

e) e

19) By many measures the world has never been in better health, a)/since 2000 the number of children who die b)/before they are five has fallen under almost half, to 5.6m, life c)/expectancy has reached 71, a gain of five years d)/no error e)/

a) a

b) b

c) c

d) d

e) e

20) Good health is something everyone can reasonably be assumed a)/ to want in order to realise their full individual potential, universal b)/care is a way of providing it that is pro-growth, c)/the costs of inaccessible, expensive and abject treatment is enormous d)/ no error e)

a) a

b) b

c) c

d) d

e) e

Answers:

1) Answer: b)

It is mentioned in para 2- So, increasingly, the poor have been paying to provide revenues for the Central government. This is also because the tax system provides many tax breaks and incentives to rich individuals and companies that allow them to avoid paying the full tax rate.

2) Answer: d)

It is mentioned in para 1- Obviously, if fiscal deficit targets are sought to be maintained, the only way to provide the necessary increases in public spending is to increase government revenues.

3) Answer: c)

It is mentioned in para 2- In that same year, indirect taxes increased by a whopping 31 per cent, as the government chose to grab all benefits of the lower global oil prices

4) Answer: a)

It is clearly mentioned in para 2&3- The larger the companies the lower the effective tax rates, Only Rs.35,754 crore was spent on the Mahatma Gandhi National Rural Employment Guarantee Scheme, which could benefit several hundred million rural people, In 2014-15, nominal GDP increased by 10.5 per cent

5) Answer: b)

It is mentioned in para 1&2- At around 18 per cent the tax-to-GDP ratio in India is lower than several Sub-Saharan African countries and significantly below China. The first disturbing trend is that the tax-to-GDP ratio has barely increased over the years of the economic boom, unlike the expected pattern whereby it increases as incomes rise.

6) Answer: d)

It is mentioned in para 2&3- Public sector companies had a higher tax rate than private sector companies. This system creates some bizarre anomalies. School education got only Rs.42,187 crore even though government schooling is woefully inadequate in terms of both quantity and quality. In 2014-15, nominal GDP increased by 10.5 per cent but direct tax collections increased by less than 9 per cent.

7) Answer: c)

Appalling means unsatisfactory or substandard

8) Answer: a)

Languishing means to go into a decline

9) Answer: b)

Regressive means to take a proportionally greater amount of tax from those on lower incomes.

10) Answer: e)

Juxtaposition means the fact of two things being seen or placed close together with contrasting effect.

Direction (11-15)

11) Answer: e)

The meaning of “fob off” is to appease or trick a person with lies or excuses or to dispose of and the phrase has been applied properly in all the sentences.

12) Answer: d)

The meaning of “stick at is “to keep trying to do something or to stay on a task or job” and the phrase has been applied properly in i, ii and iv sentences.

13) Answer: c)

The meaning of “lead up to is “to aim at or route movement to something or to proceed toward something” and the phrase has been applied properly in i and iii sentences.

14) Answer: d)

The meaning of “fold into is “to blend something or to make an object by folding something” and the phrase has been applied properly in i and ii sentences.

15) Answer: b)

The meaning of “make for is “to move or head towards or tend to result in or be received as” and the phrase has been applied properly in ii and iii sentences.

Direction (16-20)

16) Answer: b)

 In part b in place of “of” it should be out

17) Answer: d)

 In part d in place of progressive it should be progressively

18) Answer: b)

 In part b in place of a it should be an

19) Answer: c)

 In part c in place of under it should be by

20) Answer: d)

 In part d in place of is it should be are

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