Passage-1

By killing transparency and competition, crony capitalism is harmful to free enterprise, opportunity and economic growth. Crony capitalism, where rich and the influential are alleged to have received land and natural resources and various licences in return for payoffs to venal politicians, is now a major issue to be tackled. One of the greatest dangers to growth of developing economies like India is the middle-income trap where crony capitalism creates oligarchies that slow down the growth.

Which among the following is the most logical corollary to the above passage ?

The correct option/answer is: "Greater transparency in the functioning of the government and promoting the financial inclusion are needed at present."

Step-by-Step Explanation:

1. Analyze the Passage:
The passage discusses the negative consequences of "crony capitalism." It highlights how crony capitalism kills transparency and competition, harming free enterprise, opportunity, and economic growth. It describes crony capitalism as a system where the rich and influential receive land, natural resources, and licenses in exchange for payoffs to corrupt politicians. Finally, it warns that crony capitalism creates oligarchies that can lead to a "middle-income trap," slowing down the growth of developing economies like India.

2. Identify the Core Issues:
The fundamental issues causing crony capitalism, as stated in the passage, are:
- A lack of transparency (since transactions occur via payoffs behind closed doors).
- A lack of competition, which concentrates resources (land, licenses, etc.) in the hands of the wealthy and influential oligarchs, excluding the general population from financial opportunities.

3. Evaluate the Options to Find the Logical Corollary:
A logical corollary is a direct consequence or a solution that naturally follows from the premises provided in the passage.
- Option 1 (Welfare schemes) and Option 4 (Manufacturing vs. service sector) are not discussed in the text and do not address the systemic issue of crony capitalism.
- Option 2 suggests providing licenses to the poor, which does not address the core issue of payoffs and lack of structural transparency.
- Option 3 directly targets the root causes highlighted in the text: increasing "transparency in the functioning of the government" directly combats the payoffs and corruption, while "promoting financial inclusion" counteracts the creation of exclusive oligarchies by allowing broader participation in the economy.

Therefore, establishing greater transparency and promoting financial inclusion is the most logical corollary to address the challenges of crony capitalism described in the passage.