Reading Comprehension

Which of the following inferences can be drawn from the content of the passage?

Directions: Read the following passage and answer the question given below it:­

Today the import duty on a complete machine is 35% for all practical purpose, whereas the import duty on raw materials and components ranges from 40-85%. The story does not end here. After paying such high import duties on component, once a machine is made, it suffers excise duty from 5% - 10% (including on the customs duty already paid). At the time of sale, the machine tools suffer further taxation, i.e. central sales tax or State sales taxes which range from 4% - 16%. This much for the tax angle. Another factor, which pushes the cost of manufacture of machine tools, is the very high rate of interest payable to banks ranging up to 22%, as against 4%-7% prevailing in advanced countries.
The production of machine tools in India being not of the same scale as it is in other countries, the price which India's machine tool builders have to pay for components is more or less based on pattern of high pricing applicable to the prices of spares. The above represents only a few of the extraneous reasons for the high cost of Indian machines.
The machines tool industry in India has an enviable record of very quick technology absorption, assimilation and development. There are a number of success stories about how machine tool builders were of help at the most critical times. It will be a pity, in fact a tragedy, if we allow this industry to die and disappear from the scene.
It is to be noted that India is at least 6000 km away from any dependable source of supply of machine tools. The Government of India has always given a great deal of importance to the development of small scale and medium scale industries. This industry has also performed pretty well. Today, they are in need of help from India's machine tool industry to enable them to produce quality components at reduced costs. Is it anybody's case that the needs of the fragile sector (which needs tender care) will be met from 6000 km away?
Then, what is it that the industry request from the Government? It wants a level playing field. In fact, all of us must have a deep introspection and recognize the fact that the machine tool industry has a very special place in the country from the point of strategic and vital interest of the nation. Most important, it requests for the Government's consideration and understanding.

The availability of Indian machine tool industry's help to small-scale industry is most likely to result in _________.

Directions: Read the following passage and answer the question given below it:­

Today the import duty on a complete machine is 35% for all practical purpose, whereas the import duty on raw materials and components ranges from 40-85%. The story does not end here. After paying such high import duties on component, once a machine is made, it suffers excise duty from 5% - 10% (including on the customs duty already paid). At the time of sale, the machine tools suffer further taxation, i.e. central sales tax or State sales taxes which range from 4% - 16%. This much for the tax angle. Another factor, which pushes the cost of manufacture of machine tools, is the very high rate of interest payable to banks ranging up to 22%, as against 4%-7% prevailing in advanced countries.
The production of machine tools in India being not of the same scale as it is in other countries, the price which India's machine tool builders have to pay for components is more or less based on pattern of high pricing applicable to the prices of spares. The above represents only a few of the extraneous reasons for the high cost of Indian machines.
The machines tool industry in India has an enviable record of very quick technology absorption, assimilation and development. There are a number of success stories about how machine tool builders were of help at the most critical times. It will be a pity, in fact a tragedy, if we allow this industry to die and disappear from the scene.
It is to be noted that India is at least 6000 km away from any dependable source of supply of machine tools. The Government of India has always given a great deal of importance to the development of small scale and medium scale industries. This industry has also performed pretty well. Today, they are in need of help from India's machine tool industry to enable them to produce quality components at reduced costs. Is it anybody's case that the needs of the fragile sector (which needs tender care) will be met from 6000 km away?
Then, what is it that the industry request from the Government? It wants a level playing field. In fact, all of us must have a deep introspection and recognize the fact that the machine tool industry has a very special place in the country from the point of strategic and vital interest of the nation. Most important, it requests for the Government's consideration and understanding.

Why do small and medium scale industries look for help from India's machine tool industry?

Directions: Read the following passage and answer the question given below it:­

Today the import duty on a complete machine is 35% for all practical purpose, whereas the import duty on raw materials and components ranges from 40-85%. The story does not end here. After paying such high import duties on component, once a machine is made, it suffers excise duty from 5% - 10% (including on the customs duty already paid). At the time of sale, the machine tools suffer further taxation, i.e. central sales tax or State sales taxes which range from 4% - 16%. This much for the tax angle. Another factor, which pushes the cost of manufacture of machine tools, is the very high rate of interest payable to banks ranging up to 22%, as against 4%-7% prevailing in advanced countries.
The production of machine tools in India being not of the same scale as it is in other countries, the price which India's machine tool builders have to pay for components is more or less based on pattern of high pricing applicable to the prices of spares. The above represents only a few of the extraneous reasons for the high cost of Indian machines.
The machines tool industry in India has an enviable record of very quick technology absorption, assimilation and development. There are a number of success stories about how machine tool builders were of help at the most critical times. It will be a pity, in fact a tragedy, if we allow this industry to die and disappear from the scene.
It is to be noted that India is at least 6000 km away from any dependable source of supply of machine tools. The Government of India has always given a great deal of importance to the development of small scale and medium scale industries. This industry has also performed pretty well. Today, they are in need of help from India's machine tool industry to enable them to produce quality components at reduced costs. Is it anybody's case that the needs of the fragile sector (which needs tender care) will be met from 6000 km away?
Then, what is it that the industry request from the Government? It wants a level playing field. In fact, all of us must have a deep introspection and recognize the fact that the machine tool industry has a very special place in the country from the point of strategic and vital interest of the nation. Most important, it requests for the Government's consideration and understanding.

Which of the following best explains the sentence ''It wants a level playing field'' as used in the passage?

The machine tool industry in India __________.

Directions: Read the following passage and answer the question given below it:­

Today the import duty on a complete machine is 35% for all practical purpose, whereas the import duty on raw materials and components ranges from 40-85%. The story does not end here. After paying such high import duties on component, once a machine is made, it suffers excise duty from 5% - 10% (including on the customs duty already paid). At the time of sale, the machine tools suffer further taxation, i.e. central sales tax or State sales taxes which range from 4% - 16%. This much for the tax angle. Another factor, which pushes the cost of manufacture of machine tools, is the very high rate of interest payable to banks ranging up to 22%, as against 4%-7% prevailing in advanced countries.
The production of machine tools in India being not of the same scale as it is in other countries, the price which India's machine tool builders have to pay for components is more or less based on pattern of high pricing applicable to the prices of spares. The above represents only a few of the extraneous reasons for the high cost of Indian machines.
The machines tool industry in India has an enviable record of very quick technology absorption, assimilation and development. There are a number of success stories about how machine tool builders were of help at the most critical times. It will be a pity, in fact a tragedy, if we allow this industry to die and disappear from the scene.
It is to be noted that India is at least 6000 km away from any dependable source of supply of machine tools. The Government of India has always given a great deal of importance to the development of small scale and medium scale industries. This industry has also performed pretty well. Today, they are in need of help from India's machine tool industry to enable them to produce quality components at reduced costs. Is it anybody's case that the needs of the fragile sector (which needs tender care) will be met from 6000 km away?
Then, what is it that the industry request from the Government? It wants a level playing field. In fact, all of us must have a deep introspection and recognize the fact that the machine tool industry has a very special place in the country from the point of strategic and vital interest of the nation. Most important, it requests for the Government's consideration and understanding.

Which of the following groups of statements is definitely TRUE in the context of the passage?

Statement (I) The vital role of India's machine tool industry has not been duly recognized by the Government. Statement (II) Small-scale industry's performance can be further improved with the help from the Indian machine tool industry. Statement (III) The author of the passage has not discussed all the factors which are responsible for high cost of Indian machines.

Directions: Read the following passage and answer the question given below it:­

Today the import duty on a complete machine is 35% for all practical purpose, whereas the import duty on raw materials and components ranges from 40-85%. The story does not end here. After paying such high import duties on component, once a machine is made, it suffers excise duty from 5% - 10% (including on the customs duty already paid). At the time of sale, the machine tools suffer further taxation, i.e. central sales tax or State sales taxes which range from 4% - 16%. This much for the tax angle. Another factor, which pushes the cost of manufacture of machine tools, is the very high rate of interest payable to banks ranging up to 22%, as against 4%-7% prevailing in advanced countries.
The production of machine tools in India being not of the same scale as it is in other countries, the price which India's machine tool builders have to pay for components is more or less based on pattern of high pricing applicable to the prices of spares. The above represents only a few of the extraneous reasons for the high cost of Indian machines.
The machines tool industry in India has an enviable record of very quick technology absorption, assimilation and development. There are a number of success stories about how machine tool builders were of help at the most critical times. It will be a pity, in fact a tragedy, if we allow this industry to die and disappear from the scene.
It is to be noted that India is at least 6000 km away from any dependable source of supply of machine tools. The Government of India has always given a great deal of importance to the development of small scale and medium scale industries. This industry has also performed pretty well. Today, they are in need of help from India's machine tool industry to enable them to produce quality components at reduced costs. Is it anybody's case that the needs of the fragile sector (which needs tender care) will be met from 6000 km away?
Then, what is it that the industry request from the Government? It wants a level playing field. In fact, all of us must have a deep introspection and recognize the fact that the machine tool industry has a very special place in the country from the point of strategic and vital interest of the nation. Most important, it requests for the Government's consideration and understanding.

Why are the Central undertakings not capable of generating power at low cost?

Directions: Read the following passage carefully and answer the given question. 

Amartya Sen wrote about the Indian tradition of skepticism and heterodoxy of opinion that led to high levels of intellectual argument. The power sector in India is a victim of this tradition at its worst. Instead of forcefully communicating, supporting and honestly and firmly implementing policies, people just debate them. It is argued that central undertakings produce power at lower tariffs and must therefore, build most of the required extra capacities. This is a delusion. They no longer have access to low-cost government funds.

Uncertainty about payment remains a reason for the hesitation of private investment. They had to sell only to SEBs (State Electricity Boards). SEB balance sheets are cleaner after the “securitisation” of the Rs. 40,000 crore or so owed by SEBs to central government undertakings, now shown as debt instruments. But, state governments have not implemented agreed plans to ensure repayment when due. The current annual losses of around Rs. 28,000 crore make repayment highly uncertain. The central undertakings that are their main suppliers have payment security because the government will come to their help. Private enterprises do not have such assurance and are concerned about payment security, that must be resolved.
                                   
By the late 1990s, improving the SEB finances was recognised as fundamental to power reform. Unbundling SEBs, working under corporate discipline and even privatisation and not vertically integrated state enterprises, are necessary for efficient and financially viable electricity enterprises. Since the government will not distance itself from managing them, privatising is an option. The Delhi model has worked. But, it receives no public support.
                                   
The Electricity Act 2003, the APRDP (Accelerated Power Reform and Development Programme) with its incentives and penalties, and the creation of independent regulatory commissions, were the means to bring about reforms to improve financial viability of power sector. Implementation has been half-hearted and results disappointing. The concurrent nature of electricity in the Constitution impedes power sector improvement. States are more responsive to populist pressures than the central government, and less inclined to take drastic action against electricity thieves.

Captive power would add significantly to capacity. However, captive generation, three years after the Act enabled it, has added little to capacity because rules for open access were delayed. Redefined captive generation avoids state vetoes on purchase or sale of electricity except to state electricity enterprises. Mandating open access on state-owned wires to power regardless of ownership and customer would encourage electricity trading. The Act recognised electricity trading as a separate activity. A surcharge on transmission charges will pay for cross-subsidies. These were to be eliminated in time. Rules for open access and quantucom of surcharge by each state commission (under broad principles defined by the central commission) have yet to be announced by some. The few who have announced the surcharge have kept it so high that no trading can take place.

What serious drawback of the states is pointed out by the author of the passage?

Directions: Read the following passage carefully and answer the given question. 

Amartya Sen wrote about the Indian tradition of skepticism and heterodoxy of opinion that led to high levels of intellectual argument. The power sector in India is a victim of this tradition at its worst. Instead of forcefully communicating, supporting and honestly and firmly implementing policies, people just debate them. It is argued that central undertakings produce power at lower tariffs and must therefore, build most of the required extra capacities. This is a delusion. They no longer have access to low-cost government funds.

Uncertainty about payment remains a reason for the hesitation of private investment. They had to sell only to SEBs (State Electricity Boards). SEB balance sheets are cleaner after the “securitisation” of the Rs. 40,000 crore or so owed by SEBs to central government undertakings, now shown as debt instruments. But, state governments have not implemented agreed plans to ensure repayment when due. The current annual losses of around Rs. 28,000 crore make repayment highly uncertain. The central undertakings that are their main suppliers have payment security because the government will come to their help. Private enterprises do not have such assurance and are concerned about payment security, that must be resolved.
                                   
By the late 1990s, improving the SEB finances was recognised as fundamental to power reform. Unbundling SEBs, working under corporate discipline and even privatisation and not vertically integrated state enterprises, are necessary for efficient and financially viable electricity enterprises. Since the government will not distance itself from managing them, privatising is an option. The Delhi model has worked. But, it receives no public support.
                                   
The Electricity Act 2003, the APRDP (Accelerated Power Reform and Development Programme) with its incentives and penalties, and the creation of independent regulatory commissions, were the means to bring about reforms to improve financial viability of power sector. Implementation has been half-hearted and results disappointing. The concurrent nature of electricity in the Constitution impedes power sector improvement. States are more responsive to populist pressures than the central government, and less inclined to take drastic action against electricity thieves.

Captive power would add significantly to capacity. However, captive generation, three years after the Act enabled it, has added little to capacity because rules for open access were delayed. Redefined captive generation avoids state vetoes on purchase or sale of electricity except to state electricity enterprises. Mandating open access on state-owned wires to power regardless of ownership and customer would encourage electricity trading. The Act recognised electricity trading as a separate activity. A surcharge on transmission charges will pay for cross-subsidies. These were to be eliminated in time. Rules for open access and quantucom of surcharge by each state commission (under broad principles defined by the central commission) have yet to be announced by some. The few who have announced the surcharge have kept it so high that no trading can take place.

Why were the results of the power sector reforms NOT anticipated?

Directions: Read the following passage carefully and answer the given question. 

Amartya Sen wrote about the Indian tradition of skepticism and heterodoxy of opinion that led to high levels of intellectual argument. The power sector in India is a victim of this tradition at its worst. Instead of forcefully communicating, supporting and honestly and firmly implementing policies, people just debate them. It is argued that central undertakings produce power at lower tariffs and must therefore, build most of the required extra capacities. This is a delusion. They no longer have access to low-cost government funds.

Uncertainty about payment remains a reason for the hesitation of private investment. They had to sell only to SEBs (State Electricity Boards). SEB balance sheets are cleaner after the “securitisation” of the Rs. 40,000 crore or so owed by SEBs to central government undertakings, now shown as debt instruments. But, state governments have not implemented agreed plans to ensure repayment when due. The current annual losses of around Rs. 28,000 crore make repayment highly uncertain. The central undertakings that are their main suppliers have payment security because the government will come to their help. Private enterprises do not have such assurance and are concerned about payment security, that must be resolved.
                                   
By the late 1990s, improving the SEB finances was recognised as fundamental to power reform. Unbundling SEBs, working under corporate discipline and even privatisation and not vertically integrated state enterprises, are necessary for efficient and financially viable electricity enterprises. Since the government will not distance itself from managing them, privatising is an option. The Delhi model has worked. But, it receives no public support.
                                   
The Electricity Act 2003, the APRDP (Accelerated Power Reform and Development Programme) with its incentives and penalties, and the creation of independent regulatory commissions, were the means to bring about reforms to improve financial viability of power sector. Implementation has been half-hearted and results disappointing. The concurrent nature of electricity in the Constitution impedes power sector improvement. States are more responsive to populist pressures than the central government, and less inclined to take drastic action against electricity thieves.

Captive power would add significantly to capacity. However, captive generation, three years after the Act enabled it, has added little to capacity because rules for open access were delayed. Redefined captive generation avoids state vetoes on purchase or sale of electricity except to state electricity enterprises. Mandating open access on state-owned wires to power regardless of ownership and customer would encourage electricity trading. The Act recognised electricity trading as a separate activity. A surcharge on transmission charges will pay for cross-subsidies. These were to be eliminated in time. Rules for open access and quantucom of surcharge by each state commission (under broad principles defined by the central commission) have yet to be announced by some. The few who have announced the surcharge have kept it so high that no trading can take place.

Directions: Choose the word or group of words which is most nearly the same in meaning to the given word.

Viability

Directions: Read the following passage carefully and answer the given question. 

Amartya Sen wrote about the Indian tradition of skepticism and heterodoxy of opinion that led to high levels of intellectual argument. The power sector in India is a victim of this tradition at its worst. Instead of forcefully communicating, supporting and honestly and firmly implementing policies, people just debate them. It is argued that central undertakings produce power at lower tariffs and must therefore, build most of the required extra capacities. This is a delusion. They no longer have access to low-cost government funds.

Uncertainty about payment remains a reason for the hesitation of private investment. They had to sell only to SEBs (State Electricity Boards). SEB balance sheets are cleaner after the “securitisation” of the Rs. 40,000 crore or so owed by SEBs to central government undertakings, now shown as debt instruments. But, state governments have not implemented agreed plans to ensure repayment when due. The current annual losses of around Rs. 28,000 crore make repayment highly uncertain. The central undertakings that are their main suppliers have payment security because the government will come to their help. Private enterprises do not have such assurance and are concerned about payment security, that must be resolved.
                                   
By the late 1990s, improving the SEB finances was recognised as fundamental to power reform. Unbundling SEBs, working under corporate discipline and even privatisation and not vertically integrated state enterprises, are necessary for efficient and financially viable electricity enterprises. Since the government will not distance itself from managing them, privatising is an option. The Delhi model has worked. But, it receives no public support.
                                   
The Electricity Act 2003, the APRDP (Accelerated Power Reform and Development Programme) with its incentives and penalties, and the creation of independent regulatory commissions, were the means to bring about reforms to improve financial viability of power sector. Implementation has been half-hearted and results disappointing. The concurrent nature of electricity in the Constitution impedes power sector improvement. States are more responsive to populist pressures than the central government, and less inclined to take drastic action against electricity thieves.

Captive power would add significantly to capacity. However, captive generation, three years after the Act enabled it, has added little to capacity because rules for open access were delayed. Redefined captive generation avoids state vetoes on purchase or sale of electricity except to state electricity enterprises. Mandating open access on state-owned wires to power regardless of ownership and customer would encourage electricity trading. The Act recognised electricity trading as a separate activity. A surcharge on transmission charges will pay for cross-subsidies. These were to be eliminated in time. Rules for open access and quantucom of surcharge by each state commission (under broad principles defined by the central commission) have yet to be announced by some. The few who have announced the surcharge have kept it so high that no trading can take place.

Which of the following was NOT considered as the instrument to accomplish financial well-being of the power sector?

Directions: Read the following passage carefully and answer the given question. 

Amartya Sen wrote about the Indian tradition of skepticism and heterodoxy of opinion that led to high levels of intellectual argument. The power sector in India is a victim of this tradition at its worst. Instead of forcefully communicating, supporting and honestly and firmly implementing policies, people just debate them. It is argued that central undertakings produce power at lower tariffs and must therefore, build most of the required extra capacities. This is a delusion. They no longer have access to low-cost government funds.

Uncertainty about payment remains a reason for the hesitation of private investment. They had to sell only to SEBs (State Electricity Boards). SEB balance sheets are cleaner after the “securitisation” of the Rs. 40,000 crore or so owed by SEBs to central government undertakings, now shown as debt instruments. But, state governments have not implemented agreed plans to ensure repayment when due. The current annual losses of around Rs. 28,000 crore make repayment highly uncertain. The central undertakings that are their main suppliers have payment security because the government will come to their help. Private enterprises do not have such assurance and are concerned about payment security, that must be resolved.
                                   
By the late 1990s, improving the SEB finances was recognised as fundamental to power reform. Unbundling SEBs, working under corporate discipline and even privatisation and not vertically integrated state enterprises, are necessary for efficient and financially viable electricity enterprises. Since the government will not distance itself from managing them, privatising is an option. The Delhi model has worked. But, it receives no public support.
                                   
The Electricity Act 2003, the APRDP (Accelerated Power Reform and Development Programme) with its incentives and penalties, and the creation of independent regulatory commissions, were the means to bring about reforms to improve financial viability of power sector. Implementation has been half-hearted and results disappointing. The concurrent nature of electricity in the Constitution impedes power sector improvement. States are more responsive to populist pressures than the central government, and less inclined to take drastic action against electricity thieves.

Captive power would add significantly to capacity. However, captive generation, three years after the Act enabled it, has added little to capacity because rules for open access were delayed. Redefined captive generation avoids state vetoes on purchase or sale of electricity except to state electricity enterprises. Mandating open access on state-owned wires to power regardless of ownership and customer would encourage electricity trading. The Act recognised electricity trading as a separate activity. A surcharge on transmission charges will pay for cross-subsidies. These were to be eliminated in time. Rules for open access and quantucom of surcharge by each state commission (under broad principles defined by the central commission) have yet to be announced by some. The few who have announced the surcharge have kept it so high that no trading can take place.

The example of “Delhi Model” quoted by the author underlines his feelings of

(A) happiness about its success (B) unhappiness for lack of public support (C) disgust towards privatisation

Directions: Read the following passage carefully and answer the given question. 

Amartya Sen wrote about the Indian tradition of skepticism and heterodoxy of opinion that led to high levels of intellectual argument. The power sector in India is a victim of this tradition at its worst. Instead of forcefully communicating, supporting and honestly and firmly implementing policies, people just debate them. It is argued that central undertakings produce power at lower tariffs and must therefore, build most of the required extra capacities. This is a delusion. They no longer have access to low-cost government funds.

Uncertainty about payment remains a reason for the hesitation of private investment. They had to sell only to SEBs (State Electricity Boards). SEB balance sheets are cleaner after the “securitisation” of the Rs. 40,000 crore or so owed by SEBs to central government undertakings, now shown as debt instruments. But, state governments have not implemented agreed plans to ensure repayment when due. The current annual losses of around Rs. 28,000 crore make repayment highly uncertain. The central undertakings that are their main suppliers have payment security because the government will come to their help. Private enterprises do not have such assurance and are concerned about payment security, that must be resolved.
                                   
By the late 1990s, improving the SEB finances was recognised as fundamental to power reform. Unbundling SEBs, working under corporate discipline and even privatisation and not vertically integrated state enterprises, are necessary for efficient and financially viable electricity enterprises. Since the government will not distance itself from managing them, privatising is an option. The Delhi model has worked. But, it receives no public support.
                                   
The Electricity Act 2003, the APRDP (Accelerated Power Reform and Development Programme) with its incentives and penalties, and the creation of independent regulatory commissions, were the means to bring about reforms to improve financial viability of power sector. Implementation has been half-hearted and results disappointing. The concurrent nature of electricity in the Constitution impedes power sector improvement. States are more responsive to populist pressures than the central government, and less inclined to take drastic action against electricity thieves.

Captive power would add significantly to capacity. However, captive generation, three years after the Act enabled it, has added little to capacity because rules for open access were delayed. Redefined captive generation avoids state vetoes on purchase or sale of electricity except to state electricity enterprises. Mandating open access on state-owned wires to power regardless of ownership and customer would encourage electricity trading. The Act recognised electricity trading as a separate activity. A surcharge on transmission charges will pay for cross-subsidies. These were to be eliminated in time. Rules for open access and quantucom of surcharge by each state commission (under broad principles defined by the central commission) have yet to be announced by some. The few who have announced the surcharge have kept it so high that no trading can take place.

Which of the following are considered necessary for improving performance of electricity enterprises?

(A) Corporate work culture (B) Privatisation (C) Properly integrated state enterprises

Directions: Read the following passage carefully and answer the given question. 

Amartya Sen wrote about the Indian tradition of skepticism and heterodoxy of opinion that led to high levels of intellectual argument. The power sector in India is a victim of this tradition at its worst. Instead of forcefully communicating, supporting and honestly and firmly implementing policies, people just debate them. It is argued that central undertakings produce power at lower tariffs and must therefore, build most of the required extra capacities. This is a delusion. They no longer have access to low-cost government funds.

Uncertainty about payment remains a reason for the hesitation of private investment. They had to sell only to SEBs (State Electricity Boards). SEB balance sheets are cleaner after the “securitisation” of the Rs. 40,000 crore or so owed by SEBs to central government undertakings, now shown as debt instruments. But, state governments have not implemented agreed plans to ensure repayment when due. The current annual losses of around Rs. 28,000 crore make repayment highly uncertain. The central undertakings that are their main suppliers have payment security because the government will come to their help. Private enterprises do not have such assurance and are concerned about payment security, that must be resolved.
                                   
By the late 1990s, improving the SEB finances was recognised as fundamental to power reform. Unbundling SEBs, working under corporate discipline and even privatisation and not vertically integrated state enterprises, are necessary for efficient and financially viable electricity enterprises. Since the government will not distance itself from managing them, privatising is an option. The Delhi model has worked. But, it receives no public support.
                                   
The Electricity Act 2003, the APRDP (Accelerated Power Reform and Development Programme) with its incentives and penalties, and the creation of independent regulatory commissions, were the means to bring about reforms to improve financial viability of power sector. Implementation has been half-hearted and results disappointing. The concurrent nature of electricity in the Constitution impedes power sector improvement. States are more responsive to populist pressures than the central government, and less inclined to take drastic action against electricity thieves.

Captive power would add significantly to capacity. However, captive generation, three years after the Act enabled it, has added little to capacity because rules for open access were delayed. Redefined captive generation avoids state vetoes on purchase or sale of electricity except to state electricity enterprises. Mandating open access on state-owned wires to power regardless of ownership and customer would encourage electricity trading. The Act recognised electricity trading as a separate activity. A surcharge on transmission charges will pay for cross-subsidies. These were to be eliminated in time. Rules for open access and quantucom of surcharge by each state commission (under broad principles defined by the central commission) have yet to be announced by some. The few who have announced the surcharge have kept it so high that no trading can take place.

Which of the following is the reason for apathy of private investors in the power sector?

Directions: Read the following passage carefully and answer the given question. 

Amartya Sen wrote about the Indian tradition of skepticism and heterodoxy of opinion that led to high levels of intellectual argument. The power sector in India is a victim of this tradition at its worst. Instead of forcefully communicating, supporting and honestly and firmly implementing policies, people just debate them. It is argued that central undertakings produce power at lower tariffs and must therefore, build most of the required extra capacities. This is a delusion. They no longer have access to low-cost government funds.

Uncertainty about payment remains a reason for the hesitation of private investment. They had to sell only to SEBs (State Electricity Boards). SEB balance sheets are cleaner after the “securitisation” of the Rs. 40,000 crore or so owed by SEBs to central government undertakings, now shown as debt instruments. But, state governments have not implemented agreed plans to ensure repayment when due. The current annual losses of around Rs. 28,000 crore make repayment highly uncertain. The central undertakings that are their main suppliers have payment security because the government will come to their help. Private enterprises do not have such assurance and are concerned about payment security, that must be resolved.
                                   
By the late 1990s, improving the SEB finances was recognised as fundamental to power reform. Unbundling SEBs, working under corporate discipline and even privatisation and not vertically integrated state enterprises, are necessary for efficient and financially viable electricity enterprises. Since the government will not distance itself from managing them, privatising is an option. The Delhi model has worked. But, it receives no public support.
                                   
The Electricity Act 2003, the APRDP (Accelerated Power Reform and Development Programme) with its incentives and penalties, and the creation of independent regulatory commissions, were the means to bring about reforms to improve financial viability of power sector. Implementation has been half-hearted and results disappointing. The concurrent nature of electricity in the Constitution impedes power sector improvement. States are more responsive to populist pressures than the central government, and less inclined to take drastic action against electricity thieves.

Captive power would add significantly to capacity. However, captive generation, three years after the Act enabled it, has added little to capacity because rules for open access were delayed. Redefined captive generation avoids state vetoes on purchase or sale of electricity except to state electricity enterprises. Mandating open access on state-owned wires to power regardless of ownership and customer would encourage electricity trading. The Act recognised electricity trading as a separate activity. A surcharge on transmission charges will pay for cross-subsidies. These were to be eliminated in time. Rules for open access and quantucom of surcharge by each state commission (under broad principles defined by the central commission) have yet to be announced by some. The few who have announced the surcharge have kept it so high that no trading can take place.

The author thinks it appropriate to

Directions: Read the following passage carefully and answer the given question. 

Amartya Sen wrote about the Indian tradition of skepticism and heterodoxy of opinion that led to high levels of intellectual argument. The power sector in India is a victim of this tradition at its worst. Instead of forcefully communicating, supporting and honestly and firmly implementing policies, people just debate them. It is argued that central undertakings produce power at lower tariffs and must therefore, build most of the required extra capacities. This is a delusion. They no longer have access to low-cost government funds.

Uncertainty about payment remains a reason for the hesitation of private investment. They had to sell only to SEBs (State Electricity Boards). SEB balance sheets are cleaner after the “securitisation” of the Rs. 40,000 crore or so owed by SEBs to central government undertakings, now shown as debt instruments. But, state governments have not implemented agreed plans to ensure repayment when due. The current annual losses of around Rs. 28,000 crore make repayment highly uncertain. The central undertakings that are their main suppliers have payment security because the government will come to their help. Private enterprises do not have such assurance and are concerned about payment security, that must be resolved.
                                   
By the late 1990s, improving the SEB finances was recognised as fundamental to power reform. Unbundling SEBs, working under corporate discipline and even privatisation and not vertically integrated state enterprises, are necessary for efficient and financially viable electricity enterprises. Since the government will not distance itself from managing them, privatising is an option. The Delhi model has worked. But, it receives no public support.
                                   
The Electricity Act 2003, the APRDP (Accelerated Power Reform and Development Programme) with its incentives and penalties, and the creation of independent regulatory commissions, were the means to bring about reforms to improve financial viability of power sector. Implementation has been half-hearted and results disappointing. The concurrent nature of electricity in the Constitution impedes power sector improvement. States are more responsive to populist pressures than the central government, and less inclined to take drastic action against electricity thieves.

Captive power would add significantly to capacity. However, captive generation, three years after the Act enabled it, has added little to capacity because rules for open access were delayed. Redefined captive generation avoids state vetoes on purchase or sale of electricity except to state electricity enterprises. Mandating open access on state-owned wires to power regardless of ownership and customer would encourage electricity trading. The Act recognised electricity trading as a separate activity. A surcharge on transmission charges will pay for cross-subsidies. These were to be eliminated in time. Rules for open access and quantucom of surcharge by each state commission (under broad principles defined by the central commission) have yet to be announced by some. The few who have announced the surcharge have kept it so high that no trading can take place.

What was been the role of the state government in implemeting the reforms?

Directions: Read the following passage carefully and answer the given question. 

Amartya Sen wrote about the Indian tradition of skepticism and heterodoxy of opinion that led to high levels of intellectual argument. The power sector in India is a victim of this tradition at its worst. Instead of forcefully communicating, supporting and honestly and firmly implementing policies, people just debate them. It is argued that central undertakings produce power at lower tariffs and must therefore, build most of the required extra capacities. This is a delusion. They no longer have access to low-cost government funds.

Uncertainty about payment remains a reason for the hesitation of private investment. They had to sell only to SEBs (State Electricity Boards). SEB balance sheets are cleaner after the “securitisation” of the Rs. 40,000 crore or so owed by SEBs to central government undertakings, now shown as debt instruments. But, state governments have not implemented agreed plans to ensure repayment when due. The current annual losses of around Rs. 28,000 crore make repayment highly uncertain. The central undertakings that are their main suppliers have payment security because the government will come to their help. Private enterprises do not have such assurance and are concerned about payment security, that must be resolved.
                                   
By the late 1990s, improving the SEB finances was recognised as fundamental to power reform. Unbundling SEBs, working under corporate discipline and even privatisation and not vertically integrated state enterprises, are necessary for efficient and financially viable electricity enterprises. Since the government will not distance itself from managing them, privatising is an option. The Delhi model has worked. But, it receives no public support.
                                   
The Electricity Act 2003, the APRDP (Accelerated Power Reform and Development Programme) with its incentives and penalties, and the creation of independent regulatory commissions, were the means to bring about reforms to improve financial viability of power sector. Implementation has been half-hearted and results disappointing. The concurrent nature of electricity in the Constitution impedes power sector improvement. States are more responsive to populist pressures than the central government, and less inclined to take drastic action against electricity thieves.

Captive power would add significantly to capacity. However, captive generation, three years after the Act enabled it, has added little to capacity because rules for open access were delayed. Redefined captive generation avoids state vetoes on purchase or sale of electricity except to state electricity enterprises. Mandating open access on state-owned wires to power regardless of ownership and customer would encourage electricity trading. The Act recognised electricity trading as a separate activity. A surcharge on transmission charges will pay for cross-subsidies. These were to be eliminated in time. Rules for open access and quantucom of surcharge by each state commission (under broad principles defined by the central commission) have yet to be announced by some. The few who have announced the surcharge have kept it so high that no trading can take place.