question_answer

Direction: Read the following passage divided into five paragraphs carefully and answer the questions that follow.

Paragraph 1: All that is solid melts into air all that is holy is profaned, and man is at last compelled to face with sober senses his real conditions of life, and his relations with his kind. Those famous words were not of course, intended as a description of the impact of the Goods and Services Tax (GST) on India's unorganised sector. But they would do just as well. GST will put paid to India's informal sector, drawing most of it into the formal universe and killing off much of what is left behind. This change will erode the flexibility the economy derives from informality and has serious implications for India's political economy.

Paragraph 2: Not paying taxes is the holy creed of the unorganised sector, although paying off the rare taxman or the more frequent inspector of labour/factories is accepted as part of the real conditions of life. The small producer supplies parts to other small producers, finished goods for export and to distributors for sale to consumers and parts and services to large firms. The small producer provides big credit to large producers, by way of accepting delayed payment for his supplies.

Paragraph 3: He pays minimal wages to employees, makes prompt payment to his own suppliers, pays protection money to the local neta-babu-police nexus and exorbitant rate of interest to those who lend him his working capital in a hardscrabble world where banks and their loans linked to the policy rate set by the Reserve Bank of India are the stuff of dreams and fairy tales. Fierce competition with others of his ilk docs not leave him the luxury of paying taxes or honestly for the power he consumes.

Paragraph 4: More than 90 per cent of India's workers find employment in the unorganised sector. The Central Statistics Office defines the organised sector in manufacturing as enterprises that employ 10 or more workers, if the enterprise uses power, or 20 or more workers, without use of electricity. The rest are unorganised, naturally.

Paragraph 5: The National Commission for Enterprises in the Unorganised Sector defined the unorganised sector as the totality of all unincorporated suppliers of goods or services with less than 10 total workers. These definitions matter less than the sector's role in cushioning the impact of regulation on the economy. Large companies can sidestep laws on minimum wage and working conditions by outsourcing much of the work to small informal firms beyond the scrutiny of the state.

 

What is the meaning of the phrase 'the stuff of dreams and fairy tales' as used in paragraph 3?

(I) The small producer is still far removed from the smooth world of banking.

(II) The wages paid to employees are so low that these cannot be found in any part of the world except India.

(III) The world of small producers is not inferior to a fairyland.

A)  Only (I)                       

B)  Only (II)          

C)    Only (III)             

D)  Both (I) and (II)

E)  Both (II) and (III)