The questions in this section are based on a single passage. The questions are to be answered on the basis of what is stated or implied in the passage. Please note that for some of the questions, more than one of the choices could conceivably answer the question. However, you are to choose the best answer; that is, the response that most accurately and completely answers the question. Passage for Questions 1 to 10 In 1954, a Bombay economist named A.D. Shroff began a Forum of Free Enterprise, whose ideas on economic development were somewhat at odds with those then influentially articulated by the Planning Commission of the Government of India. Shroff complained against the ‘indifference, if not discouragement’ with which the state treated entrepreneurs. At the same time as Shroff, but independently of him, a journalist named Philip Spratt was writing a series of essays in favour of free enterprise. Spratt was a Cambridge communist who was sent by the party in 1920s to foment revolution in the subcontinent. Detected in the act, he spent many years in an Indian jail. The books he read in the prison, and his marriage to an Indian woman afterwards, inspired a steady move rightwards. By the 1950s, he was editing a pro-American weekly from Bangalore, called MysIndia. There he inveighed against the economic policies of the government of India. These, he said, treated the entrepreneur ‘as a criminal who has dared to use his brains independently of the state to create wealth and give employment’. The state’s chief planner, P.C. Mahalanobis, had surrounded himself with Western leftists and Soviet academicians, who reinforced his belief in ‘rigid control by the government over all activities’. The result, said Spratt, would be ‘the smothering of free enterprise, a famine of consumer goods, and the tying down of millions of workers to soul-deadening techniques.’ The voices of men like Spratt and Shroff were drowned in the chorus of popular support for a model of heavy industrialization funded and directed by the governments. The 1950s were certainly not propitious times for free marketers in India. But from time to time their ideas were revived. After the rupee was devalued in 1966, there were some moves towards freeing the trade regime, and hopes that the licensing system would also be liberalized. However, after Indira Gandhi split the Congress Party in 1969, her government took its ‘left turn’, nationalizing a fresh range of industries and returning to economic autarky. 1. Which of the following statements can most reasonably be inferred from the information available in the passage: (a) P.C. Mahalanobis believed in empowering private entrepreneurs and promoting free market. (b) Philip Spratt preferred plans that would create economic conditions favourable for a forward march by the private enterprise. (c) Restrictions on free markets enriched large Indian companies. (d) Philip Spratt opposed the devaluation of rupee in 1966. Which of the following statements is least likely to be inferred from the passage. (a) Acceptance of A.D. Shroff’s plans in the official circles smothered free enterprise in India. (b) The views of the Forum of Free Enterprise ran against the conception of development then prevalent among the policy makers. (c) A.D. Shroff believed that state should actively support the private sector. (d) Philip Spratt had been educated in Cambridge. Select the statement that best captures the central purpose of this passage.
(a) Highlight that even though there were advocates for free-market and private enterprise in the early years of independent India, they were crowded out by others who supported a dominant role for state over private enterprise. (b) Explain the politics behind Indira Gandhi’s decision to nationalize the banks. (c) Demonstrate with the help of statistics how the preference of policy makers for Soviet-style economic policies prevented...