1996 General Studies, all questions

UPSC Prelims 1996 · General Studies

Question 31: Economy and Social Development

Assertion (A): An important policy instrument of economic liberalization is reduction in import duties on capital goods. Reason (R): Reduction in import duties would help the local entrepreneurs to improve technology to face the global markets. In the context of the above two statements, which one of the following is correct?

aBoth A and R are true and R is the correct explanation of A
bBoth A and R are true and R is not a correct explanation of A
cA is true but R is false
dA is false but R is true

AnswerThe answer is (a).

A is true: cutting import duties on capital goods was a central instrument of the 1991 liberalisation. R is true and gives the reason: cheaper imported machinery lets domestic producers upgrade their technology and compete in world markets. So R explains A. Remember: cheaper capital goods mean easier modernisation and greater competitiveness.

  • A. Lower duties on capital goods were a major instrument of liberalisation.
  • R. Cheaper imported machinery helps local producers upgrade technology and compete.

How you could have got this

If you were sure statement 1 is correct, (d) goes. Then judge the second statement; if it is correct too, decide whether it explains the first.

This follows an unofficial answer: UPSC has not published its key for this year, and if that answer is wrong, so is this path.

Which options go is worked out from UPSC’s key and the options, not by a model.

Why each option is right or wrong
  • (a) Right: both are true and R states why the policy is used.
  • (b) R does explain A: cheaper capital goods lead to better technology and competitiveness.
  • (c) R is true, not false: cheaper machinery helps producers modernise.
  • (d) A is true: lowering duties on capital goods was a key reform.

Explanation: written by UPSC Grade, not by UPSC.

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Source: UPSC, Civil Services (Preliminary) Examination 1996, General Studies. UPSC's own paper isn't online; the words are from a published compilation. The paper on upsc.gov.in.