Statement–Argument (Loss-Making PSUs): Statement: Should the government close down loss-making public sector enterprises (PSEs)? Arguments: I) No, employees will lose jobs, security, and earnings—what would they do? II) Yes, in a competitive world the rule is “survival of the fittest.” Choose which argument is strong.

Introduction / Context:
PSE policy balances fiscal prudence and market efficiency against employment/security and strategic roles. Both sides can be strong depending on restructuring options and social safety nets.

Given Data / Assumptions:

• Argument II: Efficiency rationale—persistent losses may drain public funds better used elsewhere; closure/privatisation can reallocate capital.
• Argument I: Social protection—sudden closure harms workers and local economies; restructuring/transition support may be needed.

Concept / Approach:
Both arguments address core objectives: II on efficiency; I on welfare/transition management.

Step-by-Step Solution:
Assess II: Valid where sustained losses and no strategic justification exist.Assess I: Valid in highlighting adjustment costs—implies phased alternatives (turnarounds, retraining, asset sale with safeguards).

Verification / Alternative check:
Common practice is conditional restructuring, not instant shutdown—corroborating dual concerns.

Why Other Options Are Wrong:
“Only I/II” ignores countervailing goals; “neither” denies real stakes.

Common Pitfalls:
Ignoring sectoral spillovers and strategic PSE roles.

Final Answer:
if either I or II is strong.