CAT Questions | CAT Critical Reasoning Questions

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Question 1: India’s baffling array of state and national labor laws date to the 1940s: one provides for the type and number of spittoons in a factory. Another says an enterprise with more than 100 workers needs government permission to scale back or close. Many Indian businesses stay small in order to remain beyond the reach of the laws. Big firms use temporary workers to avoid them. Less than 15% of Indian workers have legal job security. The new government can sidestep the difficult politics of curbing privileges by establishing a new, simpler labor contract that gives basic protection to workers but makes lay-offs less costly to firms. It would apply only to new hires; the small proportion of existing workers with gold-star protections would keep them.

Which of the following options best summarizes the main idea of the paragraph?

1. More Indian workers can get permanent jobs and legal job security if existing labor laws are reformed.
2. Effective labor law reform can encourage many Indian businesses to grow to more than 100 workers.
3. Outdated Indian labor laws need to be simplified to provide basic protection to workers and curb privileges.
4. The difficult politics of curbing privileges can be avoided if the changes in the labor law only apply to the new hires.

Explanatory Answer

Method of solving this CAT Question from Critical Reasoning:

This paragraph is about dated Indian labor laws. It cites some examples highlighting how some aspects of the laws are irrelevant today, how these are affecting both firms and people they employ and suggests a possible solution to the “difficult politics of curbing privileges�.

In summary, the labor laws in India are dated and need to be reformed. A simpler labor contract that gives basic protection to workers while restricting the privileges for new hires and making layoffs less costly to firms is needed.

The question reads which of the options best summarizes the paragraph.

Let’s consider the options:

Option A- More Indian workers can get permanent jobs and legal job security if existing labor laws are reformed.

The paragraph states that big firms use temporary workers to avoid laws that are applicable for enterprises with over 100 workers. Thus, only a small percentage of Indian workers have legal job security.

From the above, we cannot however conclude that if labor laws are reformed, more workers can get permanent jobs. There could be other factors influencing whether workers are taken in as temporary or permanent.

Also, the above is not the main idea of the paragraph. Temporary workers are one aspect of the impact of outdated labor laws discussed by the paragraph; it does not summarize the paragraph.

Option B- Effective labor law reform can encourage many Indian businesses to grow to more than 100 workers.

The paragraph does argue that outdated labor laws mean that most businesses stay small to avoid them. So the above is a reasonable conclusion that can be drawn from the paragraph. However, it is not the main idea of the paragraph, and does not summarize it.

Option D- The difficult politics of curbing privileges can be avoided if the changes in the labor law only apply to the new hires

Again, this is stated in the paragraph. However, does it summarize the paragraph? This option only touches upon one aspect of labor law reform suggested. Hence this is not the correct choice of answer.

Option C- Outdated Indian labor laws need to be simplified to provide basic protection to workers and curb privileges.

We can see that this option touches upon the main points of the paragraph- outdated labor laws, need for reform to simplify, basic protection for workers and curbing privileges.

This is hence the option that best summarizes the paragraph.

The question is "Which of the following options best summarizes the main idea of the paragraph?"
The option is C

Hence, the answer is C

Choice C is the correct answer.