Read
the following passage and answer the questions 61-65.
**Much
has been said and written about what foreign direct investment (FDI) in retail
can do. Depending on which side of the ideological divide is speaking, the
assertions are either that it is a magic wand to fix many big problems or that
it is a destroyer of honest livelihoods, with little benefits of its own. What
is common to both sides is that they are mostly low on fact, high on opinion
and generate enormous amounts of confusion. Which is why, we think it is
necessary to sift through all of the noise and look truth in the eye. The
facts, as we see it, tell us that it has become a symbolic issue, far beyond
what reality demands it ought to be; and that there is no need for either great
celebration or for deep despair over the idea that FDI in retail is
now a reality. Our analysis tells a fairly straightforward story.
The government has hugely exaggerated the quantum and immediacy of benefits it put on the table to sell the policy—that consumers will benefit enormously, employment generation will be huge, the country’s supply chain will be transformed and large numbers of small producers and farmers will gain. As things stand, even if modern retail were to take off on all cylinders, these arguments would still not hold water for the next 10 years.
For one, there is the fact that aside from very old markets like America and Europe, in most newly developed markets, modern trade accounts for only 20-25 percent of all retail. India is already at 8 percent—which is significant—but the impact hasn’t been as dramatic as one would have assumed.
Then there is the fact that the economics of the Indian market is such that it makes little sense for global retailers to focus on all consumers. We’re convinced they will focus their energies on the top 33 percent of urban Indian households (a mere 10 percent of all Indian households); investing in the others isn’t quite what they know how to do profitably yet.
As for small manufacturers, we don’t see that huge numbers of them will benefit. Retailers across the world like to work with a small group of select vendors because it makes for better profitability. So yes, a small number will benefit significantly. And yes, employment will be generated. But it won’t be anywhere close to the numbers now being touted.
Then there is the argument that encouraging modern retail to invest will provide the much-needed booster shot for the country’s dismal supply chain infrastructure. Here again, let’s face it. Retailers aren’t in the business of building national infrastructure. About the only infrastructure they’d be interested in is their last mile.
now a reality. Our analysis tells a fairly straightforward story.
The government has hugely exaggerated the quantum and immediacy of benefits it put on the table to sell the policy—that consumers will benefit enormously, employment generation will be huge, the country’s supply chain will be transformed and large numbers of small producers and farmers will gain. As things stand, even if modern retail were to take off on all cylinders, these arguments would still not hold water for the next 10 years.
For one, there is the fact that aside from very old markets like America and Europe, in most newly developed markets, modern trade accounts for only 20-25 percent of all retail. India is already at 8 percent—which is significant—but the impact hasn’t been as dramatic as one would have assumed.
Then there is the fact that the economics of the Indian market is such that it makes little sense for global retailers to focus on all consumers. We’re convinced they will focus their energies on the top 33 percent of urban Indian households (a mere 10 percent of all Indian households); investing in the others isn’t quite what they know how to do profitably yet.
As for small manufacturers, we don’t see that huge numbers of them will benefit. Retailers across the world like to work with a small group of select vendors because it makes for better profitability. So yes, a small number will benefit significantly. And yes, employment will be generated. But it won’t be anywhere close to the numbers now being touted.
Then there is the argument that encouraging modern retail to invest will provide the much-needed booster shot for the country’s dismal supply chain infrastructure. Here again, let’s face it. Retailers aren’t in the business of building national infrastructure. About the only infrastructure they’d be interested in is their last mile.
The
only argument that holds true is that kiranas or the small, traditional
shopkeepers who are now an Indian staple will not die. But that is a tribute to
the small shopkeeper rather than prescience on the part of the government.
A more honest case for FDI in modern retail would be that it will lay the foundations for a new industry, ‘guaranteed to grow’ for at least the next five decades. Do we need it? The question is rhetorical. Did we need cheaper air travel, more television entertainment, cell phones, air-conditioned cars?
Now that we’ve stated our assessment upfront, we’d like to explain how and why we came to these conclusions.
61) What is the ideological divide as per the passage?
A more honest case for FDI in modern retail would be that it will lay the foundations for a new industry, ‘guaranteed to grow’ for at least the next five decades. Do we need it? The question is rhetorical. Did we need cheaper air travel, more television entertainment, cell phones, air-conditioned cars?
Now that we’ve stated our assessment upfront, we’d like to explain how and why we came to these conclusions.
61) What is the ideological divide as per the passage?
a) it is a magic wand to fix
many big problems
b) is necessary to sift
through all of the noise and look truth in the eye
c) It is good for the
economy but can have negative effects as well
d) Some think that it can
fix the economy and others consider it a bane
62) What is
the main flaw according to the author in the arguments put forth by the sides
of ideological divide?
a) They are based on false data
b) They are just opinions
c) They are not based on data and facts
and are opinionated
d) They generate enormous amount of
confusion.
63) On what
basis the author says that the Government has exaggerated the Pro’s of FDI in
Retail?
a) Percentage of modern trade in India
is close to saturation
b) Percentage of modern trade in India
is 8 percent whereas that in Developed nations is 20-25 percent
c) The impact of modern trade in India
is overestimated.
d) Retailers would focus on urban
population only. Thus the impact would be less
e) C and D both
64) What
according to the author can be case for introducing FDI?
a) Much more choices for consumers
b) Much more and cheaper choices for
consumers
c) Large scale job creation
d) None of the above
65) Choose
the word which is similar to the word Staple used in the above Paragraph.
a) Cardinal
b) unimportant
c) torpid
d) emollient
e) serendipity
66) Choose
the option that represents a logical arrangement of the sentences to form a
meaningful paragraph
A)
Each sale leads to a fat commission ranging from 6 percent to as high as 20
percent of its overall value.
B) Why are so many E-commerce companies hitching themselves to
the marketplace model so rapidly?
C)
A lot of this can go straight to the bottom line because significantly less of
their cash needs to be used up in marketing, fulfilment (the need to stock
inventory to better fulfil orders) and customer service
D)
To understand that, imagine them crossing a long, dark tunnel at the end of
which lie untold riches.
E)
They see a light at the end of the tunnel, the marketplace model, which allows
them to scale sales dramatically by becoming the platform where millions of
buyers and sellers meet and transact.
a) BDEAC b) BDAEC c) DBCEA d) ABDEC e) CABDE
a) BDEAC b) BDAEC c) DBCEA d) ABDEC e) CABDE
67) Choose
the option that most suitably fills the blank
There
is a lower density of retailers in third- or fourth-tier cities, so people in
these markets are really under-served and there is high pent-up demand for
various products and services. The Internet can aggregate demand in all these
cities, which means you can offer all customers, in one realm, a lot of
variety. Based on my research, the more remote the area, the higher the
___________ to consume from the Internet
a) Plagiarism
b) agility
c) need
d) propensity
e) Ruthlessness
68) There is a lower density of retailers in third- or
fourth-tier cities, so people in these markets are really under-served and
there is high pent-up demand for various products and services. The Internet
can aggregate demand in all these cities, which means you can offer all
customers, in one realm, a lot of variety. Based on my research, the more
remote the area, the higher the ___________ to consume from the Internet
Which of the
following sentences could succeed the above paragraph?
a) In a sense, it would be better to target smaller cities.
b) If someone wants to serve these locations, they could potentially do very well.
c) People in these cities are developing earning potential and disposable income, they’re aware of new brands and want to consume as much as their friends in the first-tier cities
d) They have things they want, but can’t get, because not enough other people share their preferences. Isolated people are very good for e-commerce businesses.
b) If someone wants to serve these locations, they could potentially do very well.
c) People in these cities are developing earning potential and disposable income, they’re aware of new brands and want to consume as much as their friends in the first-tier cities
d) They have things they want, but can’t get, because not enough other people share their preferences. Isolated people are very good for e-commerce businesses.
There
is a lower density of retailers in third- or fourth-tier cities, so people in
these markets are really under-served and there is high pent-up demand for
various products and services. The Internet can aggregate demand in all these
cities, which means you can offer all customers, in one realm, a lot of
variety. Based on my research, the more remote the area, the higher the
___________ to consume from the Internet
69) What is the opposite in meaning with word aggregate mentioned in the above paragraph?
a) disperse
b) compound
c) heaped
d) cumulate
e) vindicate
70)
Find the odd one out
a) belligerent
b) bellicose
c) finicky
d) aggressive
** The Above Passage has been taken from THE FORBES INDIA magazine for Educational Purposes. The questions have been ingeniously developed.
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