#10 Free Practice Reading Comprehension For ADRE 2.0 & Other Govt Exams

Important Vocabs

1.Impeding (verb) = to slow the movement,
progress, or action of (someone or something)
Synonyms: Hinder, obstruct
Antonyms: Facilitate, aid

2.Durable (adj) = able to withstand wear,pressure, or damage
Synonyms: Long-lasting, sturdy
Antonyms: Fragile, perishable

3.Stubbornly (adv) = in a way that shows
determination not to change one’s attitude or
position on something, especially in spite of
good arguments or reasons to do so
Synonyms: Obstinately, persistently
Antonyms: Flexibly, accommodatingly

4.Posit (verb) = to put forward as a basis of
argument or assumption
Synonyms: Propose, suggest
Antonyms: Deny, refute

5.Anticipate (verb) = to regard as probable
Synonyms: Expect, foresee
Antonyms: Ignore, disregard

6.Assert (verb) = to state a fact or belief
confidently and forcefully
Synonyms: Declare, affirm
Antonyms: Deny, question

7.Augur (verb) = to predict a good or bad outcome
Synonyms: Foretell, predict
Antonyms: Assure, guarantee

8.Discretionary (adj) = available for use at the
discretion of the user
Synonyms: Optional, elective
Antonyms: Mandatory, compulsory

Read The Passage Carefully And Answer The Questions Given Below

The RBI’s Monetary Policy Committee (MPC) has opted to keep the benchmark policy repo rate unchanged at 6.5% for a seventh consecutive meeting citing food price pressures that are impeding its efforts to slow inflation to the 4% target on a durable basis. Explaining the rate decision and the MPC’s resolve to keep the policy stance focused on the withdrawal of accommodation, RBI Governor Shaktikanta Das remarked that the ‘elephant in the room – inflation’ , which had hit a peak of 7.8% in April 2022, ‘appeared to be returning to the forest after having gone out for a walk’ . “We would like the elephant to return to the forest and remain there on a durable basis,” he said, emphasising that in the best interest of the economy, it was essential to ensure that retail inflation continued to moderate and aligned to the target on a durable basis. The monetary authority’s repeated emphasis on ‘a durable basis’ underlines its concern that headline inflation and food price inflation in particular have remained stubbornly unpredictable, with the headline Consumer Price Index-based reading stuck above the RBI’s 4% target for 53 months through February 2024. Nor are the MPC’s projections for price stability in the new fiscal year significantly reassuring in terms of the target: CPI inflation is expected to slow slightly to an average of 4.9% in the current quarter, then decelerate markedly and dip below target to 3.9% in Q2, before quickening again to 4.6% and 4.5% in Q3 and Q4, respectively.

The MPC is, however, more confident about the outlook for economic growth in the 12 months through March 2025, with the GDP expected to expand by 7% on average this year. For this it cites a multiplicity of factors: from expectations of a normal south-west monsoon, that it posits will boost agricultural activity and rural demand, to sustained momentum in the manufacturing and services sectors. It also points to the RBI’s March round of the consumer confidence survey, which indicates that urban households are less pessimistic about the current situation and anticipate improvements in one year’s time on all five key parameters surveyed. Monetary policymakers assert that improving incomes and a rise in readiness to spend on non-essentials augur well for a strengthening in private consumption, which has been struggling for momentum in recent quarters. It is the expectation of strong growth that gives the RBI the policy space to focus on targeting inflation, Mr. Das said. Only too aware that sticky inflation has not only dampened discretionary spending so far but also led to a sharp surge in personal loans for meeting essential expenditure, the RBI chief’s determination to send the elephant back to the forest or risk seeing growth lose momentum again is well justified. Price stability can and must be non-negotiable.

SUMMARIZATION

The RBI’s Monetary Policy Committee (MPC) has decided to maintain the benchmark policy repo rate at 6.5% for the seventh consecutive meeting due to persistent food price pressures hindering efforts to curb inflation. RBI Governor Shaktikanta Das likened inflation to an ‘elephant in the room’, emphasizing the need for sustainable moderation in retail inflation aligned with the 4% target. Despite concerns over stubbornly high inflation, the MPC remains optimistic about economic growth, projecting a 7% expansion in GDP for the fiscal year ending March 2025. Factors such as expectations of a normal monsoon, sustained momentum in manufacturing and services sectors, and improving consumer confidence contribute to this outlook. However, the MPC acknowledges the challenges posed by sticky inflation, underscoring the importance of maintaining price stability alongside economic growth.

Questions based on the passage

1. What is the benchmark policy repo rate maintained by the RBI’s Monetary Policy Committee (MPC)?
   a) 7%
   b) 6.5%
   c) 5%
   d) 4.5%
2. Why did the MPC keep the policy repo rate unchanged?
   a) Due to economic recession
   b) Due to food price pressures impeding efforts to slow inflation
   c) Due to excessive government spending
   d) Due to low GDP growth
3. According to RBI Governor Shaktikanta Das, what is the ‘elephant in the room’?
   a) Unemployment
   b) Inflation
   c) GDP growth
   d) Fiscal deficit
4. How long has the headline Consumer Price Index-based reading been above the RBI’s 4% target?
   a) 6 months
   b) 12 months
   c) 24 months
   d) 53 months
5. What is the projected average CPI inflation for the current quarter?
   a) 3.9%
   b) 4.5%
   c) 4.9%
   d) 7.8%
6. What is the projected GDP growth for the year through March 2025?
   a) 5%
   b) 6%
   c) 7%
   d) 8%
7. What factor is expected to boost agricultural activity and rural demand according to the MPC?
   a) Normal north-east monsoon
   b) Normal south-west monsoon
   c) Severe drought
   d) Heavy floods
8. According to the consumer confidence survey, what are urban households less pessimistic about?
   a) Inflation
   b) Unemployment
   c) Economic growth
   d) Current situation and future improvements
9. What does the MPC expect to strengthen private consumption?
   a) Decrease in income levels
   b) Rise in readiness to spend on essentials
   c) Improving incomes and willingness to spend on non-essentials
   d) Decrease in consumer confidence
10. Why does the RBI chief emphasize the importance of targeting inflation?
    a) To boost government spending
    b) To encourage personal loans
    c) To ensure price stability and support economic growth
    d) To reduce GDP growth rate

Answers