As per the given passage, which of the following reason(s) led to the augmentation of the private investment in the country?

(i) Fierce market acquiring strategies of the firms

(ii) Ambitious target set by the Government of the country

(iii) Increase in FDI in the country

In the given statement, “This is why it is important that policymakers or entrepreneurs do not take their eye off the ball based on one-off incident”, what ‘off incident’ is author talking about?

Read the following passage carefully and answer the questions given below them. Certain words/phrases have been printed in bold to help you locate them while answering some of the questions.

Recently we saw an outpouring of grief nationwide over the tragic decision made by an Indian entrepreneur to end his life. V.G. Siddhartha of Café Coffee Day had built a pioneering consumer business and acquired one of the largest retail footprints in the food and beverage space in India, attracting marquee investors. His story is a stark reminder that entrepreneurship is a journey of highs and lows, which doesn’t just require capability and risk appetite on the part of the promoter but also demands great resilience. Along with commiserations, the incident has also attracted some sweeping criticism uninformed and unjustified — of the business practices of the private equity and venture capital industry. The truth is that the risk capital supplied by venture capital investors has been invaluable to entrepreneurship in India, where promoter funding by banks is frowned upon and founders are forced to rely on family and friends or take recourse to high-cost informal debt.

In the past decade, the ₹14 lakh crore of capital supplied by private equity and venture capital funds has played a pivotal role in birthing and scaling up over 4,000 Indian ventures. In addition to creating millions of jobs, firms funded by these investors pay more taxes, are better governed and make efficient use of scarce capital. This has resulted in the co-creation of popular consumer franchises like Ola, Swiggy and Paytm; bankrolled roads, airports, oil pipelines and telecommunications assets; and aided the crucial economic task of deleveraging distressed firms. This spigot of private capital has remained open for Indian ventures even as the economy and public markets have witnessed sharp ups and downs.

In fact, private investors have come to play such an important role in the Indian economy that their annual investments amounting to 1%-1.5% of the GDP, once believed to be sufficient to meet the country’s growth aspirations, are now proving inadequate. India’s economy is reaping its demographic dividends and young entrepreneurs and mature mega firms are taking make-or-break bets on the consumer markets. Banking and insurance companies require billions of dollars in equity capital, privatisation is now on the anvil and an ambitious infrastructure build-out is transforming Tier-II towns. India will now need to attract private capital amounting to 3%-4% of GDP for the ‘Great March’ that Prime Minister Narendra Modi has flagged off to $5 trillion GDP. This is why it is important that policymakers or entrepreneurs do not take their eye off the ball based on one-off incident.

There has also been criticism of private equity investors for focussing on debt deals. Today, private capital pools offer many classes of assets, from venture to private equity to venture debt to promoter funding to hybrid instruments. It is only at the promoter’s behest that private capital providers structure capital infusions as debt rather than equity deals. Further, promoters are often reluctant to cede control in their ventures and hence end up taking capital in the form of debt.

That’s the fallacy of the infamous Indian promoter’s ‘curse’. Promoters embrace the double jeopardy of wanting to be in ‘control’ (the magic number of 51%) of their venture, while also believing that their equity is undervalued by the markets. Full of optimism about future pricing, they often resort to high-cost borrowings by pledging their shares. The result becomes evident during volatile times. As to the cost of debt, it must also be understood that the main mandate of private equity investors is to measure, underwrite and price risk. Structured as limited-life closed-end funds, they have a contractual obligation and fiduciary duty to meet the return expectations of their investors and to return the capital within a relatively short time frame of five-seven years.

But the Siddhartha incident does have one major takeaway: founders in India need more equity funding, so that they can avoid the curse of overleveraging. When entrepreneurs take on aggressively priced debt payable within stringent timelines, it exposes their venture to extreme fragility. Equity capital in contrast is patient. Companies with growth ambitions should therefore be ideally funded with 40%-50% equity, which can act as their lifeboats in difficult times. Equity funding makes sense for private investors too, as it allows a longer runway to scale up a business. This results in a larger pie for everyone — the founder, investors, lenders and the economy. However, punishing capital based on one event can prove to be a capital punishment for India’s entrepreneurial ecosystem.

What mistake(s) promoters make while acquiring funds from private equity investors?

Read the following passage carefully and answer the questions given below them. Certain words/phrases have been printed in bold to help you locate them while answering some of the questions.

Recently we saw an outpouring of grief nationwide over the tragic decision made by an Indian entrepreneur to end his life. V.G. Siddhartha of Café Coffee Day had built a pioneering consumer business and acquired one of the largest retail footprints in the food and beverage space in India, attracting marquee investors. His story is a stark reminder that entrepreneurship is a journey of highs and lows, which doesn’t just require capability and risk appetite on the part of the promoter but also demands great resilience. Along with commiserations, the incident has also attracted some sweeping criticism uninformed and unjustified — of the business practices of the private equity and venture capital industry. The truth is that the risk capital supplied by venture capital investors has been invaluable to entrepreneurship in India, where promoter funding by banks is frowned upon and founders are forced to rely on family and friends or take recourse to high-cost informal debt.

In the past decade, the ₹14 lakh crore of capital supplied by private equity and venture capital funds has played a pivotal role in birthing and scaling up over 4,000 Indian ventures. In addition to creating millions of jobs, firms funded by these investors pay more taxes, are better governed and make efficient use of scarce capital. This has resulted in the co-creation of popular consumer franchises like Ola, Swiggy and Paytm; bankrolled roads, airports, oil pipelines and telecommunications assets; and aided the crucial economic task of deleveraging distressed firms. This spigot of private capital has remained open for Indian ventures even as the economy and public markets have witnessed sharp ups and downs.

In fact, private investors have come to play such an important role in the Indian economy that their annual investments amounting to 1%-1.5% of the GDP, once believed to be sufficient to meet the country’s growth aspirations, are now proving inadequate. India’s economy is reaping its demographic dividends and young entrepreneurs and mature mega firms are taking make-or-break bets on the consumer markets. Banking and insurance companies require billions of dollars in equity capital, privatisation is now on the anvil and an ambitious infrastructure build-out is transforming Tier-II towns. India will now need to attract private capital amounting to 3%-4% of GDP for the ‘Great March’ that Prime Minister Narendra Modi has flagged off to $5 trillion GDP. This is why it is important that policymakers or entrepreneurs do not take their eye off the ball based on one-off incident.

There has also been criticism of private equity investors for focussing on debt deals. Today, private capital pools offer many classes of assets, from venture to private equity to venture debt to promoter funding to hybrid instruments. It is only at the promoter’s behest that private capital providers structure capital infusions as debt rather than equity deals. Further, promoters are often reluctant to cede control in their ventures and hence end up taking capital in the form of debt.

That’s the fallacy of the infamous Indian promoter’s ‘curse’. Promoters embrace the double jeopardy of wanting to be in ‘control’ (the magic number of 51%) of their venture, while also believing that their equity is undervalued by the markets. Full of optimism about future pricing, they often resort to high-cost borrowings by pledging their shares. The result becomes evident during volatile times. As to the cost of debt, it must also be understood that the main mandate of private equity investors is to measure, underwrite and price risk. Structured as limited-life closed-end funds, they have a contractual obligation and fiduciary duty to meet the return expectations of their investors and to return the capital within a relatively short time frame of five-seven years.
But the Siddhartha incident does have one major takeaway: founders in India need more equity funding, so that they can avoid the curse of overleveraging. When entrepreneurs take on aggressively priced debt payable within stringent timelines, it exposes their venture to extreme fragility. Equity capital in contrast is patient. Companies with growth ambitions should therefore be ideally funded with 40%-50% equity, which can act as their lifeboats in difficult times. Equity funding makes sense for private investors too, as it allows a longer runway to scale up a business. This results in a larger pie for everyone — the founder, investors, lenders and the economy. However, punishing capital based on one event can prove to be a capital punishment for India’s entrepreneurial ecosystem.

As per the given passage, Private investors play an important role by

Read the following passage carefully and answer the questions given below them. Certain words/phrases have been printed in bold to help you locate them while answering some of the questions.

Recently we saw an outpouring of grief nationwide over the tragic decision made by an Indian entrepreneur to end his life. V.G. Siddhartha of Café Coffee Day had built a pioneering consumer business and acquired one of the largest retail footprints in the food and beverage space in India, attracting marquee investors. His story is a stark reminder that entrepreneurship is a journey of highs and lows, which doesn’t just require capability and risk appetite on the part of the promoter but also demands great resilience. Along with commiserations, the incident has also attracted some sweeping criticism uninformed and unjustified — of the business practices of the private equity and venture capital industry. The truth is that the risk capital supplied by venture capital investors has been invaluable to entrepreneurship in India, where promoter funding by banks is frowned upon and founders are forced to rely on family and friends or take recourse to high-cost informal debt.

In the past decade, the ₹14 lakh crore of capital supplied by private equity and venture capital funds has played a pivotal role in birthing and scaling up over 4,000 Indian ventures. In addition to creating millions of jobs, firms funded by these investors pay more taxes, are better governed and make efficient use of scarce capital. This has resulted in the co-creation of popular consumer franchises like Ola, Swiggy and Paytm; bankrolled roads, airports, oil pipelines and telecommunications assets; and aided the crucial economic task of deleveraging distressed firms. This spigot of private capital has remained open for Indian ventures even as the economy and public markets have witnessed sharp ups and downs.

In fact, private investors have come to play such an important role in the Indian economy that their annual investments amounting to 1%-1.5% of the GDP, once believed to be sufficient to meet the country’s growth aspirations, are now proving inadequate. India’s economy is reaping its demographic dividends and young entrepreneurs and mature mega firms are taking make-or-break bets on the consumer markets. Banking and insurance companies require billions of dollars in equity capital, privatisation is now on the anvil and an ambitious infrastructure build-out is transforming Tier-II towns. India will now need to attract private capital amounting to 3%-4% of GDP for the ‘Great March’ that Prime Minister Narendra Modi has flagged off to $5 trillion GDP. This is why it is important that policymakers or entrepreneurs do not take their eye off the ball based on one-off incident.

There has also been criticism of private equity investors for focussing on debt deals. Today, private capital pools offer many classes of assets, from venture to private equity to venture debt to promoter funding to hybrid instruments. It is only at the promoter’s behest that private capital providers structure capital infusions as debt rather than equity deals. Further, promoters are often reluctant to cede control in their ventures and hence end up taking capital in the form of debt.

That’s the fallacy of the infamous Indian promoter’s ‘curse’. Promoters embrace the double jeopardy of wanting to be in ‘control’ (the magic number of 51%) of their venture, while also believing that their equity is undervalued by the markets. Full of optimism about future pricing, they often resort to high-cost borrowings by pledging their shares. The result becomes evident during volatile times. As to the cost of debt, it must also be understood that the main mandate of private equity investors is to measure, underwrite and price risk. Structured as limited-life closed-end funds, they have a contractual obligation and fiduciary duty to meet the return expectations of their investors and to return the capital within a relatively short time frame of five-seven years.

But the Siddhartha incident does have one major takeaway: founders in India need more equity funding, so that they can avoid the curse of overleveraging. When entrepreneurs take on aggressively priced debt payable within stringent timelines, it exposes their venture to extreme fragility. Equity capital in contrast is patient. Companies with growth ambitions should therefore be ideally funded with 40%-50% equity, which can act as their lifeboats in difficult times. Equity funding makes sense for private investors too, as it allows a longer runway to scale up a business. This results in a larger pie for everyone — the founder, investors, lenders and the economy. However, punishing capital based on one event can prove to be a capital punishment for India’s entrepreneurial ecosystem.

Which of the following best represent the tone of the passage?

Read the following passage carefully and answer the questions given below them. Certain words/phrases have been printed in bold to help you locate them while answering some of the questions.

Recently we saw an outpouring of grief nationwide over the tragic decision made by an Indian entrepreneur to end his life. V.G. Siddhartha of Café Coffee Day had built a pioneering consumer business and acquired one of the largest retail footprints in the food and beverage space in India, attracting marquee investors. His story is a stark reminder that entrepreneurship is a journey of highs and lows, which doesn’t just require capability and risk appetite on the part of the promoter but also demands great resilience. Along with commiserations, the incident has also attracted some sweeping criticism uninformed and unjustified — of the business practices of the private equity and venture capital industry. The truth is that the risk capital supplied by venture capital investors has been invaluable to entrepreneurship in India, where promoter funding by banks is frowned upon and founders are forced to rely on family and friends or take recourse to high-cost informal debt.

In the past decade, the ₹14 lakh crore of capital supplied by private equity and venture capital funds has played a pivotal role in birthing and scaling up over 4,000 Indian ventures. In addition to creating millions of jobs, firms funded by these investors pay more taxes, are better governed and make efficient use of scarce capital. This has resulted in the co-creation of popular consumer franchises like Ola, Swiggy and Paytm; bankrolled roads, airports, oil pipelines and telecommunications assets; and aided the crucial economic task of deleveraging distressed firms. This spigot of private capital has remained open for Indian ventures even as the economy and public markets have witnessed sharp ups and downs.

In fact, private investors have come to play such an important role in the Indian economy that their annual investments amounting to 1%-1.5% of the GDP, once believed to be sufficient to meet the country’s growth aspirations, are now proving inadequate. India’s economy is reaping its demographic dividends and young entrepreneurs and mature mega firms are taking make-or-break bets on the consumer markets. Banking and insurance companies require billions of dollars in equity capital, privatisation is now on the anvil and an ambitious infrastructure build-out is transforming Tier-II towns. India will now need to attract private capital amounting to 3%-4% of GDP for the ‘Great March’ that Prime Minister Narendra Modi has flagged off to $5 trillion GDP. This is why it is important that policymakers or entrepreneurs do not take their eye off the ball based on one-off incident.

There has also been criticism of private equity investors for focussing on debt deals. Today, private capital pools offer many classes of assets, from venture to private equity to venture debt to promoter funding to hybrid instruments. It is only at the promoter’s behest that private capital providers structure capital infusions as debt rather than equity deals. Further, promoters are often reluctant to cede control in their ventures and hence end up taking capital in the form of debt.

That’s the fallacy of the infamous Indian promoter’s ‘curse’. Promoters embrace the double jeopardy of wanting to be in ‘control’ (the magic number of 51%) of their venture, while also believing that their equity is undervalued by the markets. Full of optimism about future pricing, they often resort to high-cost borrowings by pledging their shares. The result becomes evident during volatile times. As to the cost of debt, it must also be understood that the main mandate of private equity investors is to measure, underwrite and price risk. Structured as limited-life closed-end funds, they have a contractual obligation and fiduciary duty to meet the return expectations of their investors and to return the capital within a relatively short time frame of five-seven years.

But the Siddhartha incident does have one major takeaway: founders in India need more equity funding, so that they can avoid the curse of overleveraging. When entrepreneurs take on aggressively priced debt payable within stringent timelines, it exposes their venture to extreme fragility. Equity capital in contrast is patient. Companies with growth ambitions should therefore be ideally funded with 40%-50% equity, which can act as their lifeboats in difficult times. Equity funding makes sense for private investors too, as it allows a longer runway to scale up a business. This results in a larger pie for everyone — the founder, investors, lenders and the economy. However, punishing capital based on one event can prove to be a capital punishment for India’s entrepreneurial ecosystem.

Which of the following is opposite in meaning to the word ‘ COMMISERATION’ as used in the passage?

Read the following passage carefully and answer the questions given below them. Certain words/phrases have been printed in bold to help you locate them while answering some of the questions.

Recently we saw an outpouring of grief nationwide over the tragic decision made by an Indian entrepreneur to end his life. V.G. Siddhartha of Café Coffee Day had built a pioneering consumer business and acquired one of the largest retail footprints in the food and beverage space in India, attracting marquee investors. His story is a stark reminder that entrepreneurship is a journey of highs and lows, which doesn’t just require capability and risk appetite on the part of the promoter but also demands great resilience. Along with commiserations, the incident has also attracted some sweeping criticism uninformed and unjustified — of the business practices of the private equity and venture capital industry. The truth is that the risk capital supplied by venture capital investors has been invaluable to entrepreneurship in India, where promoter funding by banks is frowned upon and founders are forced to rely on family and friends or take recourse to high-cost informal debt.

In the past decade, the ₹14 lakh crore of capital supplied by private equity and venture capital funds has played a pivotal role in birthing and scaling up over 4,000 Indian ventures. In addition to creating millions of jobs, firms funded by these investors pay more taxes, are better governed and make efficient use of scarce capital. This has resulted in the co-creation of popular consumer franchises like Ola, Swiggy and Paytm; bankrolled roads, airports, oil pipelines and telecommunications assets; and aided the crucial economic task of deleveraging distressed firms. This spigot of private capital has remained open for Indian ventures even as the economy and public markets have witnessed sharp ups and downs.

In fact, private investors have come to play such an important role in the Indian economy that their annual investments amounting to 1%-1.5% of the GDP, once believed to be sufficient to meet the country’s growth aspirations, are now proving inadequate. India’s economy is reaping its demographic dividends and young entrepreneurs and mature mega firms are taking make-or-break bets on the consumer markets. Banking and insurance companies require billions of dollars in equity capital, privatisation is now on the anvil and an ambitious infrastructure build-out is transforming Tier-II towns. India will now need to attract private capital amounting to 3%-4% of GDP for the ‘Great March’ that Prime Minister Narendra Modi has flagged off to $5 trillion GDP. This is why it is important that policymakers or entrepreneurs do not take their eye off the ball based on one-off incident.

There has also been criticism of private equity investors for focussing on debt deals. Today, private capital pools offer many classes of assets, from venture to private equity to venture debt to promoter funding to hybrid instruments. It is only at the promoter’s behest that private capital providers structure capital infusions as debt rather than equity deals. Further, promoters are often reluctant to cede control in their ventures and hence end up taking capital in the form of debt.

That’s the fallacy of the infamous Indian promoter’s ‘curse’. Promoters embrace the double jeopardy of wanting to be in ‘control’ (the magic number of 51%) of their venture, while also believing that their equity is undervalued by the markets. Full of optimism about future pricing, they often resort to high-cost borrowings by pledging their shares. The result becomes evident during volatile times. As to the cost of debt, it must also be understood that the main mandate of private equity investors is to measure, underwrite and price risk. Structured as limited-life closed-end funds, they have a contractual obligation and fiduciary duty to meet the return expectations of their investors and to return the capital within a relatively short time frame of five-seven years.

But the Siddhartha incident does have one major takeaway: founders in India need more equity funding, so that they can avoid the curse of overleveraging. When entrepreneurs take on aggressively priced debt payable within stringent timelines, it exposes their venture to extreme fragility. Equity capital in contrast is patient. Companies with growth ambitions should therefore be ideally funded with 40%-50% equity, which can act as their lifeboats in difficult times. Equity funding makes sense for private investors too, as it allows a longer runway to scale up a business. This results in a larger pie for everyone — the founder, investors, lenders and the economy. However, punishing capital based on one event can prove to be a capital punishment for India’s entrepreneurial ecosystem.

Which of the following is opposite in the meaning to the word ‘ PIVOTAL’ as used in the passage?

Read the following passage carefully and answer the questions given below them. Certain words/phrases have been printed in bold to help you locate them while answering some of the questions.

Recently we saw an outpouring of grief nationwide over the tragic decision made by an Indian entrepreneur to end his life. V.G. Siddhartha of Café Coffee Day had built a pioneering consumer business and acquired one of the largest retail footprints in the food and beverage space in India, attracting marquee investors. His story is a stark reminder that entrepreneurship is a journey of highs and lows, which doesn’t just require capability and risk appetite on the part of the promoter but also demands great resilience. Along with commiserations, the incident has also attracted some sweeping criticism uninformed and unjustified — of the business practices of the private equity and venture capital industry. The truth is that the risk capital supplied by venture capital investors has been invaluable to entrepreneurship in India, where promoter funding by banks is frowned upon and founders are forced to rely on family and friends or take recourse to high-cost informal debt.

In the past decade, the ₹14 lakh crore of capital supplied by private equity and venture capital funds has played a pivotal role in birthing and scaling up over 4,000 Indian ventures. In addition to creating millions of jobs, firms funded by these investors pay more taxes, are better governed and make efficient use of scarce capital. This has resulted in the co-creation of popular consumer franchises like Ola, Swiggy and Paytm; bankrolled roads, airports, oil pipelines and telecommunications assets; and aided the crucial economic task of deleveraging distressed firms. This spigot of private capital has remained open for Indian ventures even as the economy and public markets have witnessed sharp ups and downs.

In fact, private investors have come to play such an important role in the Indian economy that their annual investments amounting to 1%-1.5% of the GDP, once believed to be sufficient to meet the country’s growth aspirations, are now proving inadequate. India’s economy is reaping its demographic dividends and young entrepreneurs and mature mega firms are taking make-or-break bets on the consumer markets. Banking and insurance companies require billions of dollars in equity capital, privatisation is now on the anvil and an ambitious infrastructure build-out is transforming Tier-II towns. India will now need to attract private capital amounting to 3%-4% of GDP for the ‘Great March’ that Prime Minister Narendra Modi has flagged off to $5 trillion GDP. This is why it is important that policymakers or entrepreneurs do not take their eye off the ball based on one-off incident.

There has also been criticism of private equity investors for focussing on debt deals. Today, private capital pools offer many classes of assets, from venture to private equity to venture debt to promoter funding to hybrid instruments. It is only at the promoter’s behest that private capital providers structure capital infusions as debt rather than equity deals. Further, promoters are often reluctant to cede control in their ventures and hence end up taking capital in the form of debt.

That’s the fallacy of the infamous Indian promoter’s ‘curse’. Promoters embrace the double jeopardy of wanting to be in ‘control’ (the magic number of 51%) of their venture, while also believing that their equity is undervalued by the markets. Full of optimism about future pricing, they often resort to high-cost borrowings by pledging their shares. The result becomes evident during volatile times. As to the cost of debt, it must also be understood that the main mandate of private equity investors is to measure, underwrite and price risk. Structured as limited-life closed-end funds, they have a contractual obligation and fiduciary duty to meet the return expectations of their investors and to return the capital within a relatively short time frame of five-seven years.

But the Siddhartha incident does have one major takeaway: founders in India need more equity funding, so that they can avoid the curse of overleveraging. When entrepreneurs take on aggressively priced debt payable within stringent timelines, it exposes their venture to extreme fragility. Equity capital in contrast is patient. Companies with growth ambitions should therefore be ideally funded with 40%-50% equity, which can act as their lifeboats in difficult times. Equity funding makes sense for private investors too, as it allows a longer runway to scale up a business. This results in a larger pie for everyone — the founder, investors, lenders and the economy. However, punishing capital based on one event can prove to be a capital punishment for India’s entrepreneurial ecosystem.

Choose the correct part of speech for the given underlined words

Recently we SAW an outpouring of grief nationwide over the tragic decision made by an Indian entrepreneur to end his life.

Read the passage carefully then answer the questions given below.

U.S. President Donald Trump opened up another front in the ongoing global trade war on Wednesday by ramping up rhetoric against the World Trade Organization (WTO). He even threatened to pull the U.S. out of the multilateral trade organisation if it fails to treat the U.S. fairly and blamed it for allowing too many countries to claim the status of a “developing country”. In a memo to the U.S. Trade Representative last month, Mr. Trump pointed out that nearly two-thirds of the 164 WTO members classified themselves as developing countries, and raised the issue of even many rich economies claiming to be “growing” rather than “grown” economies. This time around, in Pennsylvania, the President targeted India and China in particular for “taking advantage” of the U.S. by classifying themselves as “developing countries” at the WTO. The status of a developing country allows countries to seek partial exemptions from the WTO’s rules for free and fair trade between countries. The status, for instance, allows countries like China and India, with their special tag, to impose higher tariffs on imports from other countries and also offer more subsidies to local producers in order to protect their domestic interests. Developed countries find this to be unfair on their producers who are put at a relative disadvantage, but countries like China have argued that their developing country status is justified given their low per capita income.

Mr. Trump’s recent attacks on the WTO would be welcome if they were truly about creating a global trading arena with lower tariffs and fewer barriers to trade. The “developing country” status, which offers substantial benefits to countries that want to protect their domestic interests and which most countries are more than happy to make use of, has indeed skewed global trade over the years in favour of certain countries. But he may be raking up the issue not to further the cause of global free trade, but simply as a convenient pretext to justify further trade barriers against China and other countries. By pointing fingers at other countries that follow protectionist policies, Mr. Trump will find it justified to impose retaliatory tariffs against them. This will help him bolster his “America First” approach and allow him to successfully hold on to his support base in America’s manufacturing belt that has been affected by foreign competition. Even if countries like China and India offer to lower their tariffs, Mr. Trump would not take them up on their offer. That is because it would require reciprocation in the way of lowering U.S. tariffs, which would ___________(I)___________.

What has been the stance of developed countries regarding unfairly awarding the status of ‘developing countries’?

Read the following passage carefully and answer the questions given below them. Certain words/phrases have been printed in bold to help you locate them while answering some of the questions.

Recently we saw an outpouring of grief nationwide over the tragic decision made by an Indian entrepreneur to end his life. V.G. Siddhartha of Café Coffee Day had built a pioneering consumer business and acquired one of the largest retail footprints in the food and beverage space in India, attracting marquee investors. His story is a stark reminder that entrepreneurship is a journey of highs and lows, which doesn’t just require capability and risk appetite on the part of the promoter but also demands great resilience. Along with commiserations, the incident has also attracted some sweeping criticism uninformed and unjustified — of the business practices of the private equity and venture capital industry. The truth is that the risk capital supplied by venture capital investors has been invaluable to entrepreneurship in India, where promoter funding by banks is frowned upon and founders are forced to rely on family and friends or take recourse to high-cost informal debt.

In the past decade, the ₹14 lakh crore of capital supplied by private equity and venture capital funds has played a pivotal role in birthing and scaling up over 4,000 Indian ventures. In addition to creating millions of jobs, firms funded by these investors pay more taxes, are better governed and make efficient use of scarce capital. This has resulted in the co-creation of popular consumer franchises like Ola, Swiggy and Paytm; bankrolled roads, airports, oil pipelines and telecommunications assets; and aided the crucial economic task of deleveraging distressed firms. This spigot of private capital has remained open for Indian ventures even as the economy and public markets have witnessed sharp ups and downs.

In fact, private investors have come to play such an important role in the Indian economy that their annual investments amounting to 1%-1.5% of the GDP, once believed to be sufficient to meet the country’s growth aspirations, are now proving inadequate. India’s economy is reaping its demographic dividends and young entrepreneurs and mature mega firms are taking make-or-break bets on the consumer markets. Banking and insurance companies require billions of dollars in equity capital, privatisation is now on the anvil and an ambitious infrastructure build-out is transforming Tier-II towns. India will now need to attract private capital amounting to 3%-4% of GDP for the ‘Great March’ that Prime Minister Narendra Modi has flagged off to $5 trillion GDP. This is why it is important that policymakers or entrepreneurs do not take their eye off the ball based on one-off incident.

There has also been criticism of private equity investors for focussing on debt deals. Today, private capital pools offer many classes of assets, from venture to private equity to venture debt to promoter funding to hybrid instruments. It is only at the promoter’s behest that private capital providers structure capital infusions as debt rather than equity deals. Further, promoters are often reluctant to cede control in their ventures and hence end up taking capital in the form of debt.

That’s the fallacy of the infamous Indian promoter’s ‘curse’. Promoters embrace the double jeopardy of wanting to be in ‘control’ (the magic number of 51%) of their venture, while also believing that their equity is undervalued by the markets. Full of optimism about future pricing, they often resort to high-cost borrowings by pledging their shares. The result becomes evident during volatile times. As to the cost of debt, it must also be understood that the main mandate of private equity investors is to measure, underwrite and price risk. Structured as limited-life closed-end funds, they have a contractual obligation and fiduciary duty to meet the return expectations of their investors and to return the capital within a relatively short time frame of five-seven years.

But the Siddhartha incident does have one major takeaway: founders in India need more equity funding, so that they can avoid the curse of overleveraging. When entrepreneurs take on aggressively priced debt payable within stringent timelines, it exposes their venture to extreme fragility. Equity capital in contrast is patient. Companies with growth ambitions should therefore be ideally funded with 40%-50% equity, which can act as their lifeboats in difficult times. Equity funding makes sense for private investors too, as it allows a longer runway to scale up a business. This results in a larger pie for everyone — the founder, investors, lenders and the economy. However, punishing capital based on one event can prove to be a capital punishment for India’s entrepreneurial ecosystem.

Choose the correct part of speech for the given underlined words

But the Siddhartha incident does have one major takeaway