Indias market regulator SEBI is on course to relax investment norms for sovereign wealth funds, the investment vehicles which are directly controlled by the government of a country. The main reason behind this move is

examrobotsa's picture

Submitted by examrobotsa on

Q: 83 (CDS-II/2011)
India’s market regulator SEBI is on course to relax investment norms for sovereign wealth funds, the investment vehicles which are directly controlled by the government of a country. The main reason behind this move is

question_subject: 

Economics

question_exam: 

CDS-II

stats: 

0,73,32,73,11,16,5

keywords: 

{'market regulator sebi': [0, 0, 0, 1], 'sebi': [0, 1, 0, 4], 'more foreign investment': [0, 0, 0, 1], 'foreign investors': [0, 0, 0, 4], 'sovereign wealth funds': [0, 0, 0, 1], 'investment norms': [0, 0, 0, 1], 'foreign governments': [0, 0, 0, 2], 'sebt desire': [0, 0, 0, 1], 'india': [8, 1, 7, 13], 'investment vehicles': [0, 0, 0, 1], 'main reason': [2, 1, 6, 3], 'government': [5, 0, 0, 1], 'mutual agreements': [0, 0, 0, 1], 'financial services': [0, 0, 2, 2]}

The correct answer is option 1: the desire of the government of India to attract more foreign investment.

Sovereign wealth funds are investment vehicles controlled by the government of a country, and they hold large amounts of capital that can be used for investments in other countries. In this case, India`s market regulator, SEBI, is planning to relax investment norms for sovereign wealth funds.

By doing so, the government of India aims to attract more foreign investment into the country. This suggests that the government believes that relaxing these norms will make India`s investment environment more favorable and appealing to foreign investors.

Options 2, 3, and 4 do not accurately explain the main reason behind SEBI`s move. Option 2 mentions pressure from foreign governments on mutual agreements, which is not mentioned in the question. Option 3 mentions SEBI`s desire for a level playing field for foreign investors, which is not stated in the question. Option 4 mentions directives from RBI, but it is not mentioned that these directives are the main reason behind the move.

Therefore, option 1 is the most accurate explanation for the main reason behind SEBI`s move.

Practice this on app