Quiz: Reading Comprehension

The
arguments in favour of FDI in defence are familiar. First, public sector
companies in defence, Research and Development and allied industries have
consistently failed to meet the requirements of the armed forces, especially
given the global revolution in military technology. Second, the superior
management culture of the private sector will ensure better adherence to budgets and timelines.
Third, the country is compelled into repeated imports without any technology
transfer (despite contractual obligations) because the military is always
urgently in need of the technology. Therefore, the argument goes, encouraging
foreign companies to invest in Indian defence and set up industries here will
mean that money will be spent within the country, generating jobs and bringing
in new know-how, with the possibility of exports.

In
my opinion, none of these arguments address the specific and unique needs of
the defence sector in India. Whatever else these measures might achieve, they
will not help accomplish what must surely be the main goal, namely to build
self-reliance in advanced military technology and reduce India’s debilitating dependence on foreign
suppliers in the area of national security.
The
FDI inflow itself tells a tale. All the liberalised provisions since 2001 have
led to a meagre inflow of only $4.8
billion, in an overall FDI inflow of around $334 billion. It may be argued that
it is too early to judge, but there are actually good reasons why defence
companies do not and will not find FDI in another country attractive, and why
there are few such examples across the world.
FDI
means a long-term presence in India, and good returns on investment are
possible only if repeat orders or contracts for newer models are assured. But,
unlike cars or white goods, that will not always happen in military equipment.
There may be gaps of many years or even decades between orders. For instance,
India bought the Mirage 2000 in the 1980s and has clinched the Rafale deal this
year, both from Dassault of France. In France itself, however, Dassault is
reasonably assured of continuous business from regular domestic and European
orders, as well as from staggered exports. Foreign subsidiaries or substantial FDI will, thus, always put
pressure on India for repeat orders. Would dependence on a Lockheed Martin
(India) or a Bharat Boeing be really very different from dependence on the U.S.
principals?
Yes,
more of India’s money will be spent in India rather than in other countries.
But the Defence Procurement Policy anyway mandates 30 per cent offsets (50 per
cent in high-value contracts). In other words, the supplier must spend 30 per
cent of the contracted value within India through local manufacture and
services. On the other hand, even if manufacture were by an Indian subsidiary,
some specialised technology or components will always need to be imported. As
is the case in car manufacture by Korean or Japanese subsidiaries in India,
where numerous models that sell in smaller volumes are only assembled in India
with imported components. FDI may, therefore, not be so different from offsets in terms of local manufacture,
jobs, or money spent.
Source-The Hindu
Q.1.
Which of the following is the antonym of the word “debilitating”?
a) Wearing
b) Restorative
c) Exhausting
d) Tiring
e) None of these
Q.2. Which of the following is
the
synonym
of the word “meagre”?
a) Sparse
b) Limited
c) Slender
d) All of the above
e) None of the above
Q.3.
Choose an appropriate Title for the above passage :
a) Defence Ties
b) The status of the deals
c) The key is
Technology not Money
d) Aerospace companies
e) India and Its Defence
Q.4.
Which of the following companies name is mentioned in the above passage?
a) Sukhoi
b) Mikoyan Gurevich
c) Dassault
d) Hindustan Aeronautics Limited
e) None of the above
Q.5. Which of the
following can be inferred from the passage?
a) The Public Sector Companies have failed to meet the requirements
and Technological advancement.
b) FDI is not the solution however technology transfer is.
c) The reason for meager inflow of investment is the weak
commitment from Indian government.
d) All of the above
e) None of the above
Q.6. Which of the following is
the
antonym
of the word “adherence”?
a) Cohere
b) Flout
c) Bond
d) Attach
e) None
Q.7. Which of the following is
the
antonym
of the word “substantial”?
a) Material
b) Significant
c) Valuable
d) Major
e) Worthless
Q.8. Why the author is insisting more on Technology transfer rather
than FDI inflow?
a) Because technology transfer
will result in the manufacturing of defence equipments indigenously.
b) Because FDI will result in the lesser money inflow.
c) Because major companies are afraid due to the non commitment
by government.
d) Both (a) and (b)
e) Both (a) and (c)
Q.9.
Which of the following is not true according to the passage?
a) Some specialized components will need to be imported even if
some Indian subsidiary manufactures it.
b) FDI will result in the sheer pressure on the government for
repeat orders.
c) Due to military needs, the country is compelled to repeated
imports.
d) FDI is needed for
the country, which will result in short term investment for good returns.
e) None of the above
Q.10. Which of the following is
the
synonym
of the word “offsets”?
a) Countervail
b) Equalize
c) Neutralize
d) Both (b) and (c)
e) All of the above

1.b
2.d
3.c
4.c
5.d
6.b
7.e
8.a
9.d
10.e