Logical Reasoning - Statement and Assumption - Discussion

In each question below is given a statement followed by two assumptions numbered I and II. You have to consider the statement and the following assumptions and decide which of the assumptions is implicit in the statement.

Give answer

  • (A) If only assumption I is implicit
  • (B) If only assumption II is implicit
  • (C) If either I or II is implicit
  • (D) If neither I nor II is implicit
  • (E) If both I and II are implicit.


Statement: The government has decided to disinvest large chunk of its equity in select public sector undertakings for a better fiscal management.


  1. The amount generated out of the disinvestment process may reduce substantially the mounting fiscal deficits.
  2. There will be enough demand in the market for the shares of these undertakings.

[A]. Only assumption I is implicit
[B]. Only assumption II is implicit
[C]. Either I or II is implicit
[D]. Neither I nor II is implicit
[E]. Both I and II are implicit

Answer: Option A


The fact given in I directly follows from the phrase '..... for a better fiscal management' in the statement. So, I is implicit. However, the public response to the new policy cannot be ascertained. So, II is not implicit.

Maitrii Dani said: (May 1, 2014)  
But if the government has decided to take an action, it must have decided after analyzing that they get adequate response. So II should also be implicit.

Anon said: (Aug 29, 2014)  
Same thoughts at Maitrii Dani. In addition, better fiscal management does not necessarily imply that there is a fiscal deficit. So to me, assumption I is not implicit either.

Eric said: (Feb 24, 2015)  
Yes, we cannot ascertain the public response. HOWEVER, it is being implied that there will be public demand because the government would not dis-invest equity if people will not buy it from them, simple economics.

Jeffrey said: (Jun 14, 2016)  
II is also implicit because if not, the government's move is useless, and I is not achievable.

Dhruv said: (Sep 6, 2016)  
How is fiscal deficit related to fiscal management?

Md Kashif said: (Nov 21, 2016)  
Anyone will sale their share only on the assumption that there would be enough demand in the market for their shares. The correct answer should be (c).

Luis said: (Dec 12, 2016)  
- That "The government has *decided*" doesn't mean that "The government has done". Thus, II is not implicit. That's something the government will learn when they actually execute the order of disinvesting.

- "Better fiscal management" doesn't imply it exists "fiscal deficit". The government may reallocate its investment to get better returns, not necessarily to reduce the deficit, much less to reduce it "substantially" (an ambiguous adverb in such a test, seriously?). So, I is not implicit either, no matter what the answer says.

- Most laughable of all is that the sentence is grammatically incorrect. If "for a better fiscal management" is the result of the disinvestment, it should be next or closer to it, as for example: "For a better fiscal management, the government has decided to disinvest large chunk of its equity in select public sector undertakings. " Otherwise, what the sentences actually means is that the government has decided to disinvest in undertakings that provide a "better fiscal management. ".

Stw said: (Jan 4, 2017)  
The statement is an expressed data in which the main focus area is "Governments decision". Assumption is something which is previously known or previously intended. So for Government to come to the decision it is very likely for them to have an assumption that there will be public demand. Hence ll is implicit.

l is simply out of scope, as nowhere it has been mentioned about mounting fiscal deficits. It is simply about better management.

Charan said: (Feb 7, 2018)  
Both are implicit. Disinvestment will generate funds to meet fiscal gap. So I holds.

Large chunk can only be sold if there is demand for it. So that disinvestment can take place. Hence II also holds.

Anshuman said: (Apr 26, 2019)  
The question is from assumptions. Thus the government is taking this step only if it has scanned the enviornment perfectly for the equity of its public sector undertakings. This implies that II is also implicit.

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