Statement–Courses of Action (public enterprise losses): Since its launch in 1981, Vayudoot has accumulated losses amounting to Rs 153 crore; which actions logically follow—(I) direct Vayudoot to reduce wasteful expenditure and increase passenger fares, and (II) provide about Rs 300 crore to make the airline economically viable?
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AEither I or II follows
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BBoth I and II follow
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COnly II follows
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DOnly I follows
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ENeither I nor II follows
Answer
Correct Answer: Only I follows
Explanation
Given data
- Persistent, substantial losses: Rs 153 crore.
- Two proposed actions: internal efficiency/price measures vs. large capital infusion.
Concept/Approach (feasibility and immediacy)When an enterprise shows sustained losses, the immediate logical step is cost control and revenue optimization before considering additional public funds.
Step 1: Assess Action IReducing wasteful expenditure and revisiting fares target operational viability; they are within management control and directly relevant.
Step 2: Assess Action IIA large grant (Rs 300 crore) without prior reforms may perpetuate inefficiency; the passage does not justify that infusion as necessary or sufficient.
Step 3: ConclusionThus, only Action I logically follows from the stated loss situation.
Verification/AlternativeTypical turnaround sequences prioritize austerity and pricing before recapitalization.
Common pitfallsAssuming more money is the default solution; ignoring the need to curb waste first.
Final AnswerOnly I follows.