Reading comprehension test 297

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Reading comprehension questions answers for competitive exam

Question 1 [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
Recommending that a debt fund of ~ 50000 crore be set up for financing infrastructure projects, an expert panel headed by HDFC Chief, Deepak Parekh, asked the government to change rules to allow funding by pension and insurance companies. The panel on the infrastructure debt fund has also urged the sectoral regulators - the Reserve Bank of India (RBI), the Securities and Exchange Board of India (SEB!), the Insurance Regulatory and Development Authority (IRDA), and the Pension Fund Regulatory and Development Authority (PFRDA) - to tweak their existing laws to enable market players to use the large amount of untapped insurance and pension funds. Such a move would help reduce interest costs and hence cut user-charges since banks are not able to provide the required long-term funds for infrastructure projects, the report said. In its report submitted to the Planning Commission, the Parekh Committee further suggested that the proposed infrastructure fund with an initial corpus of ~ 50000 crore be set up as a Venture Capital Fund (VCF) to be managed and regulated by SEBI. For this purpose, SEBI should be asked to amend its guidelines for VCF to enable investment in the debt market. At present, only a part of VCF is allowed to be invested in debt, the panel said. The report also said pension and insurance money should be permitted to be invested in the fund to provide long-term financing to infrastructure projects coming under the Public-Private Partnership (PPP) model. The report suggested that the IRDA and the interim pension watchdog PFRDA be approached to modify the rules to enable these funds to invest in the infra fund. Besides, the report recommended that foreign insurance, pension and sovereign fun be asked to invest in the proposed infra fund. For this, the RBI will have to be approached to create a special window for these kinds of foreign debt with tenure of 10 years or more. Also, the multilateral agencies like the World Bank and the Asian Development Bank would be asked to invest in the fund. .

According to the information given in the passage, PPP Model is:

A
accepted by the Parekh Committee in toto
B
accepted by the Parekh Committee for a particular case only
C
accepted by the Parekh Committee as a necessary evil
D
accepted for sure by the Parekh Committee for a particular case
Question 1 Explanation: 
The one thing we know from this passage is that the Parekh committee has recommended the PPP in a given case; whether is accepts it only for this case or all cases is something we do not know. Hence, the correct option is option D.
Question 2 [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
Current government rules do not allow funding by
A
insurance companies
B
pension funds
C
private investors
D
Both (a) and (b)
Question 2 Explanation: 
Refer to the first sentence of the passage.
Question 3 [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
The proposed infrastructural fund should be
A
set up as a Venture Capital Fund (VCF)
B
set up with an initial corpus Rs. 5000 crore
C
managed and regulated by SBI
D
managed and regulated by RBI
Question 3 Explanation: 
Directly stated in the middle of the passage.
Question 4 [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
The current rules and regulations of IRDA and PFRDA
A
may require a change
B
are sufficient
C
do not require a change
D
are useless
Question 4 Explanation: 
Refer the second sentence of the passage.
There are 4 questions to complete.

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