IBPS RRB Officer Scale 1 Model Paper 2

Directions (121-135): Read the following passage carefully and answer thequestions given below it. Certain words have been printed in bold to help youlocate them while answering some of the question.
‌‌‌‌Political ploys initially hailed as master-strokes often end up as flops. TheRs. 60,000 crore farm loan waiver announced in the budget writes off 100% ofoverdues of small and marginal farmers holding upto two hectares, and 25% ofoverdues of larger farmers. While India has; enjoyed 8%-9% GDP growth forthepast few years, the boom has bypassed many rural areas and farmer distress andsuicides have made newspaper headlines. Various attempts to provide relief(employment guarantee scheme, public distribution system) have made littleimpact, thanks to huge leakages from the government’s lousy delivery systems.So, many economists think the loan waiver is a worthwhile alternative to provide relief.
‌‌‌‌However the poorest rural, folk are landless labourers, who get neither farmloans nor waivers. Half of the small and marginal farmers get no loans frombanks and depend entirely on moneylenders, and will not benefit. Besides, ruralIndia is full of the family holdings rather than individual holdings and familyholdings will typically be much larger than two hectares even for. dirt- poor farmers,who will, therefore, be denied the 100% waiver. It will thus fail in both economicand political objectives. IRDP loans to the rural poor in the 1980s demonstratedthat crooked bank officials demand bribes amounting to one-third the intendedbenefits. Very few of the intended beneficiaries who merited relief received.it.After the last farm loan waiver will similarly slow down fresh loans to deservingfarmers. While overdues to co-operatives may be higher, economist Surjit Bhallasays less than 5% of farmer loans to banks are overdue i.e. overdues exist foronly 2.25 million out of 90 million farmers. If so, then the 95% who have repaidloans will not benefit. They will be angry at being penalised for honesty.
‌‌‌‌The budget thus grossly overestimates the number of beneficiaries, It alsounderestimates the negative effects of the waiver-encouraging wilful default inthe future and discouraging fresh bank lending for,some years. Instead of tryingto reach the needy, through a plethora of leaky schemes we should transfer cashdirectly to the needy using new technology like bi-ometric smart cards, whichare now being used in many countries, and mobile’phones bank accounts. Thenbenefits can go directly to phone accounts operable only by those with biometriccards,:ending the massive leakages of current schemes.
‌‌‌‌The political benefits of the loan waiver have also been exaggerated since ifonly a small, fraction of farm families benefit, and many.of these have to paybribes to get the actual benefit, will the waiver really ! be a massive vote- winner?Members of joint families will feel aggrieved that, despite having, less than onehectare per head, their family holding is too large ,to qualify forthe 100% waiver.All finance ministers, of central or state governments, give away freebies in theirlast budgets, hoping to win electoral regards. Yet, four-fifth of all incumbentgovernments are voted out. This shows that beneficiaries of favours are not notablygrateful, while those not so favoured may feel aggrieved, and vote for the opposition.That seems to be why election budgets constantly fail to win elections in Indiaand the loan waiver will not change that pattern.