Passage - 104 Asset allocation is the most important investment decision we will ever make, and sadly, most of us do not give that decision the importance it deserves. We are adamant about seeking predictability with our future. We tend to think of investing in risky assets as extremely volatile and value eroding. We also dislike fluctuating returns and the loss of control of investment. We think our money is best left idle, unproductive but safe. There is no asset that is risk-free. We could lose our jobs, our homes can lose value, our banks can go bankrupt, our bonds can default, the government can collapse and companies we chose fondly may cease to exist. But we cannot live life assuming that all these extreme events are waiting to happen, and all at the same time. All these extreme forms of risks we know will not manifest at the same time. 141. Which one of the following statements best implies the suggestion given by the author of the passage? [UPSC CSE Pre. 2020] (a) Distribute your wealth across different kinds of assets so that your risks would be minimized. (b) Risk-taking behaviour should be a necessary component of your personality if you want to generate wealth. (c) While making investments, find a trustworthy asset management organization which would manage your wealth for you. (d) You should know that investing your money is a risky business. Passage - 105 Although most of the Genetically Modified (GM) crops cultivated now are genetically engineered for a single trait, in future, crops genetically engineered for more than one trait will be the norm. Thus, biotechnology's role in agriculture and the regulation of the same cannot be understood solely in the context of the current generation of GM crops. Instead, there is a need to take a comprehensive look, taking into account various aspects, including socio-economic impacts, so that the potential of the technology can be harnessed while minimizing negative impacts. Given the importance of biotechnology in developing varieties that can help in climate change mitigation and adaptation, not using biotechnology as a part of the climate change action plan cannot be an option. Domestic regulation of biotechnology cannot be viewed in isolation of trade policy and obligations under various international treaties and conventions. 142. With reference to the above passage, the following assumptions have been made: 1. Biotechnology regulation is an evolving process. 2. Participation of people is needed in policy decisions regarding biotechnology regulation. 3. Biotechnology regulation should take into account socio-economic aspects in decision-making. 4. Wider involvement of political executive in biotechnology regulation improves its effectiveness in dealing with the country's trade policies and international obligations. Which of the above assumptions are valid? [UPSC CSE Pre. 2020] (a) 1, 2 and 4 only (b) 1 and 3 only (c) 2, 3 and 4 only (d) 1, 2, 3 and 4 143. Which one of the following statements best implies the crux of the passage? [UPSC CSE Pre. 2020] (a) Precautionary principle is not given importance in current debate on developing GM crops. (b) Biotechnology is not currently used in climate change mitigation and adaptation mechanisms. (c) Biotechnology's role is not confined to the current priorities of developing GM crops. (d) The negative impacts of biotechnology are not properly understood. Passage - 106 Private investment in general is volatile. Foreign private investment is more volatile because the available investment avenues are significantly greater (i.e., the entire world). Therefore, the responsibility of providing employment cannot be left to Foreign Direct Investment (FDI). The current FDI inflows are volatile over time and across sectors and regions, which is a necessary consequence of their search for the highest returns. The adverse consequences are unstable employment and an accentuation of income and regional inequalities. A probable positive consequence of foreign investment is the inflow of new technology and its subsequent diffusion. However, the technology diffusion is not at all certain because the existing state of physical and human capital in India may prove inadequate for the diffusion. 144. With reference to the above passage, the following assumptions have been made: 1. Relying on foreign investment in the long run is not an economically sound policy. 2. Policies must be undertaken to reduce volatility in foreign private investment. 3. Policies must be undertaken to strengthen domestic private investment. 4. Public investment should be given priority over private investment. 5. Substantial public investment in education and health should be undertaken. Which of the above assumptions is/are valid? [UPSC CSE Pre. 2020] (a) 1, 2 and 4 (b) 1, 3 and 5 (c) 2, 4 and 5 (d) 3 only Passage - 107 Many opportunities to harness the highly skewed, seasonal and spatial distribution of monsoon flows, which occur in a four-month period from June to September annually, have been lost. Since these few months account for most of the rainfall and consequent freshwater availability, the need for holding rainwater in reservoirs, for subsequently releasing it for use over the year, is a necessity nobody can afford to overlook. Climate change will continue to affect weather conditions and create water shortages and excesses. While millions suffer from droughts and floods, waters in the country's many rivers flow unutilized, and are discharged into the sea every year. 145. With reference to the above passage, which of the following could be the most rational and practical implications for India? 1. Inter-linking of rivers should be undertaken. 2. A network of dams and canals should be built across the country for proper distribution of water. 3. Farmers should be provided easy loans for digging borewells. 4. Usage of water for agriculture should be regulated by law. 5. Distribution of river water among regions should be regulated by the Union Government. Select the correct answer using the code given below. [UPSC CSE Pre. 2020] (a) 1 and 2 (b) 2, 4 and 5 (c) 1, 3 and 4 (d) 2, 3 and 5 Passage - 108 People will invest in education whenever they are granted the economic freedom to fully enjoy its benefits. Again, this is for the obvious reason that the return on education increases as the level of economic freedom rises. When people, thanks to lower tax rates, are allowed to retain most of the higher income that they gain from each incremental level of education, it makes eminent sense to invest in education. On the other hand, when the government decides to tax the higher income of educated individuals at even higher rates, it makes very little sense to invest in educating oneself further. The same incentives apply to parents who decide on whether to invest in their children's education. 146. With reference to the above passage, the following assumptions have been made: 1. Lower tax rates in a country invariably translate into greater investments in higher education. 2. Investment in the education of children ensures their economic freedom. 3. Economic freedom has a positive impact on building up human capital. Which of the above assumptions is/are valid? [UPSC CSE Pre. 2020] (a) 1 only (b) 2 only (c) 3 only (d) 1, 2 and 3 Passage - 109 Our urban bodies cannot possibly ensure sustainable delivery of water in our cities unless financing mechanisms are put in place. Water delivery requires heavy investment in collecting it from a natural source, treating it to make it potable, and laying a distribution network of pipes for delivery to the users. It also requires investments in sewerage infrastructure and sewage treatment plants so that the sewers can carry the wastewater to these plants to ensure that no untreated sewage is discharged back into natural water bodies. If our cities were rich enough to meet the entire cost, water could be delivered free. They are not. 147. What is the most logical and crucial message conveyed by the passage? [UPSC CSE Pre. 2020] (a) Urban local bodies must recover costs through user charges. (b) Urban local bodies are not efficient enough to meet the water requirements of our cities. (c) Water shortage in our cities is a perennial problem that cannot be solved. (d) In view of the water crisis in our cities, there is an urgent need to limit the population of cities by adopting an upper limit of population size. 148. With reference to the above passage, the following assumptions have been made: 1. Rich cities only can ensure sustainable delivery of water. 2. Sustainable delivery of water in cities means much more than supplying water to households. Which of the above assumptions is/are valid? [UPSC CSE Pre. 2020] (a) 1 only (b) 2 only (c) Both 1 and 2 (d) Neither 1 nor 2 Passage - 110 In India, agriculture still engages about half of workforce, and about 85 per cent of its farms are small and marginal. Compared to China and Vietnam, which have experienced fast structural and rural transformation, India's story is of slow transformation. As a result, poverty reduction in India was at a much slower pace during 1988-2014, compared to China and Vietnam. India's poverty reduction was slow during 1988-2005, but during 2005-2012, it accelerated dramatically—almost three times faster than during the earlier period. What did India do during this period? Research reveals that the relative price scenario changed significantly (by more than 50%) in favour of agriculture in the wake of rising global prices. This boosted private investments in agriculture by more than 50%. As a result, agri-GDP growth touched 4.1% during 2007-2012 as against 2.4% during 2002-2007. The net surplus of agri-trade touched $25 billion in 2013-2014; real farm wages rose by 7% per annum. All this led to unprecedented fall in poverty. 149. With reference to the above passage, the following assumptions have been made: 1. Structural and rural transformation is impossible when farms are mainly small and marginal. 2. A good price incentive can trigger investments in agriculture. 3. India needs to build value chains for high-value agri-products like livestock and horticulture. 4. Higher global prices of agricultural commodities are essential for India's poverty reduction. Which of the above assumptions are valid? [UPSC CSE Pre. 2020] (a) 1 and 3 (b) 2 and 4 (c) 2 and 3 (d) 3 and 4 150. Which one of the following statements best reflects the critical message of the passage? [UPSC CSE Pre. 2020] (a) India should create large-scale off-farm rural employment to reduce poverty in the near future. (b) India should create a large number of farmer producer companies. (c) Private investment in agriculture should be given priority over public investment. (d) Inclusive agricultural growth is key to reduce poverty in the near future.