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Direction: Read the following passage carefully and answer the questions given below it. Certain words are given in bold to help you locate them while answering some of the questions.

The slippage in the Centre's fiscal deficit to 3.5% of GDP in 2017-18, it transpires, is largely due to the sharp fall in non-tax revenues and resultant rise in the revenue deficit. National Institute of Public Finance and Policy director Ratin Roy underscores the need for structural reforms to raise non-tax revenues and sees lowering the revenue deficit as an immediate priority. This makes sense, with the qualification that the deficit has to be brought down not so much by lowering expenditure as by raising non-tax revenues. Maintenance of capital assets and building human capital via education and healthcare fall under revenue expenditure and cutting these would be counterproductive, and may even impact return on capital assets in the economy. The Medium-Term Fiscal Policy (MTFP) Statement is right to say so. However, both the Centre and states must raise non-tax revenues. Regrettably, non-tax revenues are projected to fall even further next fiscal, due to a steep Rs. 10,792 crore drop in dividends from public sector enterprises, state-owned banks and the RBI. The policy on dividends must be reviewed. PSUs that fail to meet their planned investment targets should surrender their funds instead of keeping them in bank deposits. These companies should pay special dividends to transfer surplus reserves. It will benefit all shareholders, and help boost revenues. Rightly, the MTFP calls for a mandatory review of user charges and fees. States should also raise non-tax revenues, setting realistic tariffs and user charges for water and power. The Centre must reconfigure its assets through stake sales and privatisation. The government should swiftly complete the privatisation of Air India, and use the proceeds to spend on capital formation. Similarly, privatisation of perennially loss-making units and enterprises that have ceased to be strategic will free up resources that can be put to more productive use. It makes sense to hive off land assets of these public sector undertakings as separate entities before privatisation so that no unearned rents accrue to the new owner.

 

What should public sector undertakings do who fail to meet their planned investment targets?

A)  They should ask the government for bail-in.

B)  They should surrender their funds.

C)  They should pay special dividends to transfer surplus reserves.

D)  Only (b) and (c)

E)  All (a), (b) and (c)