Directions (1 to 5): Read the following passage carefully and answer the questions given below it. Certain words have been printed in bold to help you to locate them while answering some of the questions.
In 1974, the Canadian government conducted a randomised controlled trial in Winnipeg, Dauphin and rural Manitoba. Lower-income households across the region were randomly allocated into seven treatment groups, along with a control. Families gained an income guarantee, dependent on their family size, constrained by their working income. The trial excluded families earning above a predetermined amount (about $13,000). Everyone else in the treatment groups was given a base amount ($3,386, equivalent to $16,094 now), while 50 cents was subtracted for every dollar earned from other sources. This negative income tax experiment, termed “Mincome”, helped over a thousand families below the poverty line in Dauphin earn a liveable income. It offered financial predictability, food insecurity vanished, education was not compromised. A guaranteed annual income (GAI) system had brought about social stability and improved health-care outcomes. With the onset of 1970s recession, induced by the oil crisis, such schemes were abandoned and any insights ignored. But briefly, there was a town with no poverty.
The idea that every individual should have access to a minimum guaranteed basic income is not new. Thomas Paine sought an equal inheritance for everyone, “a national fund” which would pay every adult a sum of “fifteen pounds sterling as compensation” for the introduction of the system of landed property. Over the last century, with the Great Depression, welfare policy in the U.S. was transformed with minimum wage legislation, while Keynesianism meant that the government would attempt to stimulate the economy during downturns by directly financing public employment and public works. Long-term support was offered to the aged, the disabled and single mothers while unemployment insurance sought to support the temporarily unemployed. The 1960s brought about the war on poverty, waged through federally funded social service and healthcare programmes. Milton Friedman sought a negative income tax, eliminating the need for a minimum wage and potentially the “welfare trap”, while bureaucracy could be curtailed. Richard Nixon supported and yet failed to push through a “Family Assistance Plan” while George McGovern’s 1972 campaign sought a $1,000 “demogrant” for all citizens. This decadal struggle against poverty in the West cut the number of those in poverty in the U.S. to 26 million from 36 million in 12 years. Education and health care were improved, but the employability and the income of the poor remained stranded. With the rise of neo-liberalism, opinion shifted. Existing welfare systems had grown too cumbersome, without eliminating poverty. Now, however, the idea of an unconditional annual income is gathering momentum. Y Combinator, of Silicon Valley fame, is testing out a new business model: handing out money, without any strings, in an unnamed U.S. community in an attempt to replace safety net welfare policies that often fail to help those with the greatest need. Finland is considering a plan to give 100,000 citizens $1,000 a month, while four cities in Netherlands are starting trial programmes.
Switzerland may have rejected, in a referendum, the idea of giving citizens about $2,500 a month, but the Canadian province of Ontario is planning a trial run. Progressives hail it as an escape route for workaholics, from oppressive jobs and situations, giving individuals greater time to build relationships and pursue education or artistic endeavours. As job concerns about automation grow, the basic income stands out as a panacea. Even India has seen its share of basic income experiments. A pilot in eight villages in Madhya Pradesh provided over 6,000 individuals a monthly payment (Rs.100 for a child, Rs. 200 for an adult; later raised to Rs. 150 and Rs. 300, respectively). The money was initially paid out as cash, while transitioning to bank accounts three months later. The transfer was unconditional, save the prevention of substitution of food subsidies for cash grants. The results were intriguing. Most villagers used the money on household improvements (latrines, walls, roofs) while taking precautions against malaria — 24.3 per cent of the households changed their main source of energy for cooking or lighting; 16 per cent had made changes to their toilet. There was a seeming shift towards markets, instead of ration shops, given better financial liquidity, leading to improved nutrition, particularly among SC and ST households, and better school attendance and performance. There was an increase in small-scale investments (better seeds, sewing machines, equipment repairs etc). Bonded labour decreased, along with casual wage labour, while self-employed farming and business activity increased. Within four months of the pilot, 95.6 per cent of the individuals had bank accounts. Within a year, 73 per cent of the households reported a reduction in their debt. There was no evidence of any increase in spending on alcohol. Before moving ahead, we would need more data to prove its applicability in the Indian context. There have only been eight large-scale pilot programmes testing the impact of a universal basic income on human well-being. Social context too matters — what might have worked in Manitoba or Kenya might not necessarily be applicable to India. We need a greater depth of pilot studies, focussed on ensuring universal access and covering minimum living expenses. With more pilots planned in Oakland, Netherlands, Germany and India, insights developed can be used to modify welfare policy.
A regular unconditional basic income, scaled up through pilots, and rolled out slowly and carefully, seems ideal for India. It can help improve living conditions including sanitation in our villages, providing them with access to better drinking water, while improving children’s nutrition. Regular basic income can help to enable households to fund their health expenses instead of encountering a vicious cycle of debt. It can help reduce child labour, while facilitating an increase in school spending. It can transform villages, enabling the growth of productive work, leading to a sustained increase in income. It could cut inequality; grow the economy; all while offering the pursuit of happiness.
- Which of the following is an impact of ‘negative income tax’ as seen in the passage?
(a)Low education standards.
(b)It helped in augmenting poor’s income notably.
(c)Employment rate is increased significantly
(d)Improvement in the general fitness level.
(e)Social insecurity.
- Which of the following is not the impact of income experiments in context of India?
(a)Decrease in the Spending on Liquor.
(b)Improvement in sanitation.
(c)Shift towards market.
(d)Improvement in school attendance.
(e)Financial inclusion.
- What is the central idea of the passage?
(a) The implementation of the negative income tax experiment in context of India.
(b) Role of Regular basic income payments to help institute rational responses to illness or hunger.
(c) The impact of Mincome on different economies of the world.
(d) Basic income can give individuals greater time to build relationships and pursue education or artistic endeavours.
(e) Shrinking bureaucracy through basic income experiment.
- Which of the following is true in context of the passage?
(i) Negative economy can help in retrenching bureaucracy.
(ii) There is no basic income scheme anymore in Canada due to oil crisis.
(iii) Richard Nixon was very critical of negative income.
(a) Both (i) and (ii).
(b) Only (i).
(c) Both (ii) and (iii).
(d) Only (ii).
(e) All of these.
- What does Y Combinator of Silicon Valley fame want to achieve with his new business model?
(a) Equal inheritance for everyone.
(b) Financial inclusion of the poor.
(c) Greater time for individuals to build relationships and pursue education or artistic endeavours.
(d) Potential to shrink bureaucracy.
(e) To eliminate the welfare trap.
Directions (6 to 10): Read the following passage carefully and answer the questions given below it.
The Prime Minister’s recent trip to Nigeria, the first bilateral prime ministerial visit to Africa since Jawaharlal Nehru’s 45 years ago, recalls a long neglected Indian obligation. “It is up to Asia to help Africa to the best of her ability,” Nehru told the Bandung Conference in 1955, “because we are sister continents. “The Prime Minister’s proposed strategic partnership with African nations might at last make good that 52-year old promise and also, perhaps, challenge China’s expedient diplomacy. In the intervening years, the West’s sanctimonious boycott of many African regimes – after nearly a century of extreme colonial exploitation – left the continent in the grip of oppressive rulers looking for new political sponsors, arms-sellers and trading partners. Not only was it an abdication of the developed world’s responsibility to the world’s least developed region, sanctions actually compounded the sufferings of poorer Africans. The Darfur killings continue and there is no mellowing of Robert Mugabe’s repression in Zimbabwe.
Abandoned by the West Africa looked elsewhere. Beijing filled the vacuum by eagerly embracing dangerous and unsavory regimes in its search for oil and other minerals. China demonstrated its influence by playing host to 48 out of 53 African leaders a year ago in a jamboree that was historic as well as historical. Historic because China has succeeded in becoming the pre-eminent outside power in Africa and its second biggest trading partner. Historical because modern Chinese diplomacy draws on the Middle kingdom’s ancient formula; the tribute system. It was how the son of Heaven brought those nations whom the Celestial Empire called “barbarians’ into his imperial trading and , through it, cultural and political system.
Contemporary China’s economic penetration of Africa also heralds a new era of cultural and political ties though the Chinese foreign ministry repeatedly assure the world that “our cooperation is not designed to be against or preclude any third party.” This is untrue in a world of finite resources. Once the Chinese are established in a country, no one else gets a foothold. Myanmar, where India failed to obtain the desired gas concessions, is a prime example. Aware that the hunt for energy is a zero-sum game, China’s leadership courts African leaders with regular visits and substantial grants. After decades of neglect – Vajpayee’s Africa visit over a decade ago was to attend a Commonwealth Summit– India will have to move cautiously but quickly if it is to break China’s monopoly. Along with investing in Africa’s human capital, China has outlined a strategic investment plan to build three to five trade economic cooperation zones in Africa by 2009 to boost trade, which is expected to tap $40 billion this year. That could double to $30 billion by 2010 on the back of an insatiable demand for natural resources to feed China’s booming economy.
- What was Jawaharlal Nehru’s consideration for helping African nations?
(a) The people in the continent were extremely backward
(b) The Bandung Conference was held in African Continent
(c) African Continent is emotionally related to Asian Continent
(d) Nehru had promised the British rulers to help Africa after independence
(e) The West had exploited African people
- The example of Myanmar given by the author proves
(a) that when China patronizes a country it does not allow other nations to enter
(b) India’s foresight to feed its growing hunger for energy
(c) Myanmar’s political acumen to have symbiosis with China
(d) that a country’s political wisdom does not necessarily establish economic stability
(e) None of these
- Which of the following is the author’s suggestion to India to break the Chinese monopoly?
(a) Move away cautiously but quickly from the African nations
(b) Arrange P. M.’s regular visits to African countries
(c) Outline a strategic plan of investment in the African countries
(d) Plan for an increased economic help to African countries
(e) None of these
- From the contents of the passage, it can be inferred that the author’s views are
(a) in favour of India gaining an edge over China
(b) against India’s entering into a competition with China
(c) in favour of not making any investment in African countries
(d) appreciate of oppressive and barbaric African rulers
(e) None of these
- The author considers the claims of the Chinese Foreign Ministry regarding third party as
(a) just and worthy of trust
(b) true but slightly exaggerated
(c) too exorbitant to be true
(d) an underestimate of the quality and quantity of their help
(e) None of these
Solution
1.(d)
Improvement in the general fitness level.
2.(a)
Refer to the 3rd paragraph of the passage “There was no evidence of any increase in spending on alcohol.”
3.(b)
Role of Regular basic income payments to help institute rational responses to illness or hunger.
4.(a)
Nixon was very supportive of the idea.
5.(b)
Refer to the second paragraph of the passage, “………..replace safety net welfare policies that often fail to help those with the greatest need.”
6.(c)
“It is up to Asia to help Africa to the best of her ability “Nehru told the Bandung conference in 1955, “ because we are sister continents.” These statements explain that African continent is emotionally related to Asian continent.
7.(a)Once the Chinese are established in a country, no one else gets a foothold. Mayanmar, where India failed to obtain the desired gas concessions, is a prime example. These lines explain China’s monopoly.
8.(e)
None of the answer choices are author’s suggestion to India to break the Chinese monopoly. In the passage the author only says that India will have to move cautiously but quickly if it is to break Chinese monopoly.
- (a)
Every where in the passage we find author favours India gaining an edge over China. Author throughout the passage is highlighting China’s own perspective while they are helping the African’s.
10.(e)
According to the passage the Chinese foreign ministry repeatedly assure the world that “our co-operation is not designed to be against or preclude any third party”. None of the answer choices matches author’s consideration because the claims of China’s foreign ministry are totally untrue.
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