Reading Comprehension Challenge - FDI Inflows in India according to RBI data

The following passage is about FDI Inflows in India according to RBI data.

Read the passage carefully and answer the questions given below.

Foreign direct investment into India in October was at the highest level in six months as the rupee depreciated to a record low and the benchmark stock index declined.  Gross FDI inflows were $6.54 billion in October, the highest since $6.7 billion in April, according to data from the Reserve Bank of India.

“The high gross FDI inflows into India in September and particularly October are consistent with a couple of large corporate acquisition deals in the previous months and possibly some early IBC (Insolvency & Bankruptcy Code) resolutions,” said Saugata Bhattacharya, chief economist at Axis Bank NSE 2.11 %. “The proximate reason might be opportunistic buying, leveraging on the weak rupee in those months and the fall in the equity markets.”

The rupee hit a record low of 74.48 a dollar on October 11, making it Asia’s worst-performing currency. However, this meant that a single dollar would have fetched more of the local currency, making sense for multinational companies to bring capital into India where they have units.

“FDIs come based on opportunity and availability of investible funds,” said Madan Sabnavis, chief economist at CARE Ratings. “India still is fast growing with hospitable FDI rules. With developed economies slowing, India offers better prospects, especially for the long term.”

The Ministry of Commerce & Industry released the e-commerce draft policy in August, aimed at promoting the sale of ‘Made in India’ goods through online retail platforms. “Fundamentals of India remain strong, better than the sovereign credit ratings assigned by the global rating agencies,” said Joydeep Sen, a consultant with PhillipCapital India. “With improvement in ease of doing business and expected continuity in government at the Centre, FDI flows are expected to be positive.”

In November, the World Bank said India had climbed 23 positions in its Ease of Doing Business Index to 77th place, becoming the top-ranked country in South Asia for the first time and third among the BRICS nations.

“Sometimes, there are lumpiness inflows on deals like Rosneft-Essar or Walmart-Flipkart,” Sen said. “That apart, on a long-term basis, India offers sustainable growth.”

(Source: The Economic Times)

Q.1. Discussion in the passage is generally concerned with

I. Depreciation in Indian rupee

II. Foreign company's investment in India.

III. Ease of doing business in India.

IV. Investment opportunities are available to foreign companies in the Indian market due to Depreciation in Indian rupee.

(a) Both I & II

(b) All I, II and III

(c) Only II

(d) All II, III and IV

(e) All of the above

Q.2. In the context of the above passage, which of the following is/are correct?

 I. FDI into India in October was highest till now as Indian rupee depreciated to record low.

 II. India still is fast growing with hospitable FDI rules.

 III. The Ministry of Commerce & Industry released the e-commerce draft policy in August, aimed at promoting the sale of ‘Made in India’ goods through online retail platforms.

(a) All I, II and III

(b) Both II and III

(c) Both I and II

(d) Only I

(e) Both I and III

Q.3. In the context of the above passage, what can be inferred from the following line?

“Sometimes, there are lumpiness inflows on deals like Rosneft-Essar or Walmart-Flipkart,” Sen said.

(a) There is a heavy inflow of deals.

(b) There is irregularity in the inflow of deals.

(c) There is continuity in the inflow of deals.

(d) There is swiftness in the inflow of deals.

(e) More than one option is correct.

 Answers & Explanations:

1. (c); The passage is generally concerned with FDI. Other options mentioned are reasons behind the highest level of FDI in the past six months.

2. (a); All the points are clearly mentioned in the passage.

3. (b); “Sometimes, there are lumpiness inflows on deals like Rosneft-Essar or Walmart-Flipkart,” Sen said. The next sentence is - “That apart, on a long-term basis, India offers sustainable growth.”- The phrase ‘that apart’  here, suggests there is some irregularity in the inflow of deals. The meaning can be inferred from the whole paragraph.

Important Vocabulary:

(i) Acquisition - An asset or object bought or obtained, typically by a library or museum.

Synonyms: Procurement, Gain, Purchase, Accretion

Antonyms: Loss, Failure, Surrender, Forfeit

Sentence Examples:

• The library has various new acquisitions.
• There are several reasons for the unsatisfactory financial results apart from the high price paid for the acquisition of the telegraphs.

(ii) Leverage - The ratio of a company's loan capital (debt) to the value of its ordinary shares (equity); gearing.

Synonyms: Clout, Advantage, Suction, Ascendancy

Antonyms: Block, Incapacity, Inferiority, Hindrance 

Sentence Examples:

• Once we're there, we'll have all the leverage we need.
• We will also explore how to leverage technology to enhance Africa's higher education goals.

(iii) Ease - Absence of difficulty or effort.

Synonyms: Comfort, Relaxation, Calmness, Serenity

Antonyms: Agitation, Discontent, Misery, Unhappiness

Sentence Examples:

• He gave up smoking with ease. 
• He felt her turmoil through their bond and ached to ease her pain.