{"id":85500,"date":"2025-06-01T03:19:05","date_gmt":"2025-06-01T03:19:05","guid":{"rendered":"https:\/\/exam.pscnotes.com\/mcq\/?p=85500"},"modified":"2025-06-01T03:19:05","modified_gmt":"2025-06-01T03:19:05","slug":"consider-the-following-statements-about-the-initial-development-of-rai","status":"publish","type":"post","link":"https:\/\/exam.pscnotes.com\/mcq\/consider-the-following-statements-about-the-initial-development-of-rai\/","title":{"rendered":"Consider the following statements about the initial development of rai"},"content":{"rendered":"

Consider the following statements about the initial development of railways in India by the British :
\n1. Private financial investors for railways would get land free from the British Government in India.
\n2. The investors would get a return of 5 percent on their capital from the government if they ran at a loss or secured inadequate profit.
\n3. The railways would be jointly managed with the government.
\nHow many of the above statements is\/are correct?<\/p>\n

[amp_mcq option1=”1″ option2=”2″ option3=”3″ option4=”None” correct=”option2″]<\/p>\n

\n
\n
This question was previously asked in<\/div>\n
UPSC CDS-1 – 2024<\/div>\n<\/div>\n
Download PDF<\/a>Attempt Online<\/a><\/div>\n<\/div>\n
\nB
\n<\/section>\n
\nStatement 1 is correct. Under the ‘guarantee system’ initiated in the mid-19th century, the British government in India provided land free of cost for the construction of railways by private companies.
\nStatement 2 is correct. The same guarantee system assured the private companies a guaranteed return (usually 5%) on their invested capital, regardless of whether the railway lines made a profit or incurred losses.
\nStatement 3 is incorrect. In the initial phase under the guarantee system, the railways were primarily managed by the private companies. While the government exercised some supervisory control over aspects like route selection and standards, it was not a system of joint management in the sense of equal participation in day-to-day operations. The government later moved towards direct state management and construction of railways.
\n<\/section>\n
\nThe guarantee system was adopted to attract hesitant British capital into railway construction in India. While it spurred rapid development, it also led to wasteful expenditure as companies were guaranteed profit even if inefficiently managed, and it placed a significant financial burden on the Indian treasury.
\n<\/section>\n","protected":false},"excerpt":{"rendered":"

Consider the following statements about the initial development of railways in India by the British : 1. Private financial investors for railways would get land free from the British Government in India. 2. The investors would get a return of 5 percent on their capital from the government if they ran at a loss or … <\/p>\n

Detailed SolutionConsider the following statements about the initial development of rai<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1087],"tags":[1103,1264,1124],"class_list":["post-85500","post","type-post","status-publish","format-standard","hentry","category-upsc-cds-1","tag-1103","tag-economic-impact-of-british-rule-on-india","tag-modern-history-of-india","no-featured-image-padding"],"yoast_head":"\nConsider the following statements about the initial development of rai<\/title>\n<meta name=\"description\" content=\"B Statement 1 is correct. Under the 'guarantee system' initiated in the mid-19th century, the British government in India provided land free of cost for the construction of railways by private companies. Statement 2 is correct. The same guarantee system assured the private companies a guaranteed return (usually 5%) on their invested capital, regardless of whether the railway lines made a profit or incurred losses. Statement 3 is incorrect. In the initial phase under the guarantee system, the railways were primarily managed by the private companies. While the government exercised some supervisory control over aspects like route selection and standards, it was not a system of joint management in the sense of equal participation in day-to-day operations. The government later moved towards direct state management and construction of railways.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/exam.pscnotes.com\/mcq\/consider-the-following-statements-about-the-initial-development-of-rai\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Consider the following statements about the initial development of rai\" \/>\n<meta property=\"og:description\" content=\"B Statement 1 is correct. Under the 'guarantee system' initiated in the mid-19th century, the British government in India provided land free of cost for the construction of railways by private companies. Statement 2 is correct. The same guarantee system assured the private companies a guaranteed return (usually 5%) on their invested capital, regardless of whether the railway lines made a profit or incurred losses. Statement 3 is incorrect. In the initial phase under the guarantee system, the railways were primarily managed by the private companies. While the government exercised some supervisory control over aspects like route selection and standards, it was not a system of joint management in the sense of equal participation in day-to-day operations. The government later moved towards direct state management and construction of railways.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/exam.pscnotes.com\/mcq\/consider-the-following-statements-about-the-initial-development-of-rai\/\" \/>\n<meta property=\"og:site_name\" content=\"MCQ and Quiz for Exams\" \/>\n<meta property=\"article:published_time\" content=\"2025-06-01T03:19:05+00:00\" \/>\n<meta name=\"author\" content=\"rawan239\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"rawan239\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"1 minute\" \/>\n<!-- \/ Yoast SEO Premium plugin. -->","yoast_head_json":{"title":"Consider the following statements about the initial development of rai","description":"B Statement 1 is correct. Under the 'guarantee system' initiated in the mid-19th century, the British government in India provided land free of cost for the construction of railways by private companies. Statement 2 is correct. The same guarantee system assured the private companies a guaranteed return (usually 5%) on their invested capital, regardless of whether the railway lines made a profit or incurred losses. Statement 3 is incorrect. In the initial phase under the guarantee system, the railways were primarily managed by the private companies. While the government exercised some supervisory control over aspects like route selection and standards, it was not a system of joint management in the sense of equal participation in day-to-day operations. 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