pyq/2015/csat/61

India has suffered from persistent high inflation. Increase in administered prices, demand and supply imbalances, imported inflation aggravated by rupee depreciation, and speculation have combined to keep high inflation going. Many of them are the outcomes of economic reforms. India’s vulnerability to prices has increased with trade liberalization. The effort to reduce subsidies has resulted in a continuous increase in administered commodity prices.

What is the most logical, rational, and crucial message that is implied in the above passage?

(A) Under the present circumstances, India should completely avoid all trade liberalization policies and all subsidies.

(B) Due to its peculiar socio-economic situation, India is not yet ready for the trade liberalization process.

(C) There is no solution in sight for the problems of continuing poverty and inflation in India in the near future.

(D) Economic reforms can often create a high-inflation economy.