Question Bank - General Aptitude

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Statement: Should the maintenance of all roads in the big cities be entrusted to private companies?Arguments:I. Yes, this is the only way to ensure good conditions of the roads throughout the year.II. No, private companies are not capable of maintaining all the roads.

A.
1
B.
2
C.
3
D.
4

Solution:

The correct answer is 3.Privatization defines as the transfer of ownership, management, and control of the public sector enterprises to the private sector.Privatization aims at providing a strong base for the inflow of Foreign Direct Investment.The enhanced inflow of FDI improves the financial strength of the economy.Government companies are converted into private companies in two ways:Transfer of Ownership and Disinvestment.Thus, we cannot conclude that private companies are incapable of maintaining all the roads. Hence, argument 2 is not strong.Privatization can lead to better services but saying that this is the "only way" is wrong. So, neither argument 1 nor 2 is strong.Additional InformationHowever, there are six methods of privatization:Public sale of sharesPublic auctionPublic tenderDirect negotiationsTransfer of control of enterprises that were controlled by the state or by municipalitiesLease with a right to purchase

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