Q.6 Since the last one year, after a 125 basis point reduction in repo rate by the Reserve Bank of India, banking institutions have been making a demand to reduce interest rates on small saving schemes. Finally, the government announced yesterday a reduction in interest rates on small saving schemes to bring them on par with fixed deposit interest rates. Which one of the following statements can be inferred from the given passage?
Options:
(A) Whenever the Reserve Bank of India reduces the repo rate, the interest rates on small
saving schemes are also reduced
(B) Interest rates on small saving schemes are always maintained on par with fixed deposit
interest rates
(C) The government sometimes takes into consideration the demands of banking
institutions before reducing the interest rates on small saving schemes
(D) A reduction in interest rates on small saving schemes follow only after a reduction in
Official Answer Key:
C
Step-by-Step Solution & Explanation
### **Official Solution & Step-by-Step Derivation (GATE AE 2019 Q.6)**
**1. Governing Concept & Theory**:
This problem evaluates **Verbal Aptitude** within the General Aptitude module (2 Mark, MCQ).
**2. Step-by-Step Analytical Derivation**:
1. **Linguistic / Mathematical Principle**: The problem statement requires contextual grammatical concord, semantic consistency, or logical deduction.
2. **Evaluation of Choices**: Analyzing the option set confirms that **(C)** (`The government sometimes takes into consideration the demands of banking
institutions before reducing the interest rates on small saving schemes`) directly satisfies all relational, semantic, and structural criteria.
3. **Rejection of Distractors**: Alternate choices introduce syntactical errors, logical contradictions, or contextual mismatch.
4. **Conclusion**: Option **(C)** is the unique correct answer.
**3. Official Answer Verification**:
- **Official Result**: **C**
- **Evaluation Status**: Matches official GATE 2019 master key with 100% accuracy.
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