EFFECTIVE READING STRATEGIES (1 TO 5)

Reading is an exercise for your mind. It is a way of turning a text into meaning and then
understanding it to interact with it through a message. To make the reading more effective, we
must make a sense of what we read. Often we unconsciously lose the meaning in between, which
causes a sense within ourselves to make use of effective reading strategies. Critical reading of a
text means to read from our own perspective, apart from what the writer has painted it for us. So,
this rational way of reading can be considered as the beginning of true learning and personal
development.
Few effective critical reading strategies are:
Previewing
It means to attain pre-knowledge about the text, before starting to read it, which may save us
time. It may be done by researching:
Who is the author?
What is the author’s purpose?
Who is the audience?

Contextualizing
Contextualizing or researching the text involves exploring the historical, cultural and
biographical frame of references of the text.
From a wider perspective, it means that we should try to differentiate between our own
understandings of the text with that of some other person’s, as an understanding of a text may
vary from time to time and place to place.

Inquisition
It is all about questioning the content of the text to understand, comprehend and clarify what you
are reading, which will help you to build interest with the text. This can be made easier by
framing 3 sets of questions:
Subject-Text (represents subject or text undergoing discussion)
Personal reality (represents your own experience)
External reality (represents the concepts of larger society)
Synopsizing
This is an effective reading strategy, which is also known by other names like outlining or
summarizing. This method is to identify the central theme of the text and then to paraphrase it in
your own words. The key to synopsizing is the ability to make out a difference between the main
idea, supporting idea and the examples.

Co-relating with related reading

This is a mode of reading based on the factor of comparison, by examining the differences or
similarities within the texts to figure it out in a better sense.

Assessing an argument
This involves testing the logicality along with the credibility and emotional impact of the text.
You can analyze an argument using these 4 steps:
1. You should thoroughly go through the instructions and arguments
2. Then spot out the assumptions and claims of the argument
3. Now you should think of counter explanations and examples of the arguments.
4. Finally, ask yourself about the changes that can be made.

Activating Prior-Knowledge
This is a method of reading a text with some pre-conceived notions in mind. This will let you get
a better understanding of the text.

Academic Reading Strategies

Being a student, one of the biggest challenges you may face is to complete reading the
academics. So if you know the different academic reading strategies, you will enjoy reading.
Here are a few of the academic reading strategies:

Scanning
Scanning is a specific reading skill that does not focus on every nook and corner of the text. We
do scanning while reading a schedule about the screen timings of a movie or a cricket match or
while going through the weather map in the newspaper. To make the scanning process more
helpful, you can use the following strategies:
 Find out the keyword from the question itself
 You should scan separately for each question
  When you re-locate the keyword, go through the surrounding texts too.

Skimming
This is a technique almost similar to that of scanning, but the aim is to collect the main points of
the text from a wider perspective. It’s just like skimming milk, where after skimming, we skim
the finest part of the milk. Likewise, when you skim a text, you will learn the main points in the
text, thereby; you can save your time. Good skimmers do not skim everything. We can do it
wisely by slowing down your pace of reading at places like:
 Introductory and concluding paragraphs
 Topic sentences
 Unfamiliar words

Intensive Reading
When compared to the other two techniques, this is relatively slower and a time consuming one.
This involves sentence to sentence reading rather than word to word reading. We should read
every sentence in detail from the beginning to the end and thereby, analyze the complete
meaning of the text. If we put too much pressure on vocabulary, then it would be a burden rather
than a blessing.

Inferring
This is a way of extracting the meaning of the text by bringing together the things that are written
or unwritten in the text along with your prior knowledge about the subject. We have to read
between the lines and understand the secondary meaning of the text.

Monitoring or Clarifying
It is a reading comprehension strategy where the reader constantly enquires whether the text
makes any sense to them and enforcing strategic methods to make the text easier. We can
understand it better by using these few methods:
 Re-read the paragraph
 Search for unfamiliar words
 Reconstruct information into an image, concept or map
EFFECTIVE READING STRATEGIES (6 TO 10)

Visualizing and Organizing

It is a method that stimulates the readers to create a vague image in their mind, about the content
they read. It’s like a person making movies or videos in their minds out of the prior knowledge,
imagination and the content of the text. This will stimulate your imagination and enhance your
involvement with the text and thus improve your mental imagery

Searching and Selecting

This is a way of searching sources of the text to choose the required piece of information to
answer the questions, solve problems, and clear the wrong interpretations or to gather
information.

Questioning
This is a mode of reading which is almost similar to that of the above-mentioned method-
‘Inquisition’, which involves questioning. This will engage us with self-questioning, by which
we will gain an answer with the help of our peers and teachers.
Some questions which will help you read effectively are:
Why did that character behave so?
What led to such an issue?
What next?
Based on Fluency Reading Strategies
Whether we read it with hatred, stumbled words or without expression, our comprehension will
be affected. Better fluency leads to better understanding. So some of the fluency reading
strategies are discussed below:
 Reading it aloud
This can be done with the help of a peer or a teacher, where, you should read it aloud, and our
peer should correct the mistakes regarding our fluency in language and correctness in sentences.
This will be quite a good way to determine our initial level of reading
  Choral Reading
This is a reading strategy that aims at the repetition of sentences. In this, you should copy what
the teacher says, just as we did in smaller classes. This will sharpen your ability to decode words
and increase vocabulary.

Partner Reading
This is a kind of peer learning where strong readers are paired with weaker ones so that the latter
can learn from the former. This will allow us to share our strengths. This is also known as Peer-
assisted learning.

Cloze Reading
This is a technique of effective reading where the instructor will read the passage aloud and will
deliberately skip certain words from the passage, and further others will be asked to read the
missing words together. This will improve our analytical as well as critical thinking ability.

SQ3R
Following an SQ3R is a well-known strategy for reading. It can be applied to a whole range of
reading purposes as it is flexible and takes into account the need to change reading speeds.
SQ3R acronym stands for:
Survey
Question
Read
Recall
Review
Reading is a skill that can be considered as a lifelong achievement. So by using wisely the
effective reading strategies, we can improve our lifelong skill, which may often save our time.
PURPOSE OF READING
Before actually beginning to read, it is important to know the purpose of reading, that is, why the
reading is being done. Knowing the purpose greatly enhances the effectiveness of the reading.
Also, knowledge of the purpose can help one adopt a style of reading best suited for the purpose.
Some of the reasons why people usually readn are:

(i) Pleasure and enjoyment:

This is probably the best reason to read anything. We have chosen the material for the purpose of
enjoying yourself. Reading entertains us, even relaxes us. However, this will rarely be the
purpose behind the reading one needs to do for academic purposes.

ii) Practical application:

Here the purpose is to gain information that we can apply or use in a practical situation. Books
such as laboratory manuals, computer manuals, instruction booklets and recipe books are all
texts that we would consult with the purpose of gaining specific information.

(iii) To get an overview:

The point here is to get a general feel for the material, to determine whether it is relevant, useful,
up-to-date, and to get a sense of how the topic is treated by the author. This is likely to be the
main purpose behind your reading when:
• We are given an extensive reading list for an assignment.
• We are doing initial library research for an essay, tutorial, research report or similar
assignments.
We need to decide which texts are most relevant or useful for your assignment.

(iv) To locate specific information:

Sometimes we know what we are looking for but do not know exactly where to find it. For
example, we might be looking for any of the following:
A specific quotation
Evidence to support a particular argument
Details about a specific person or event
A map
A diagram
A statistic or table of statistics
To find this sort of information might means we have to consult several books or sources. In
these circumstances, we will be reading with the aim of zeroing in on the information we are
looking for.

(v) To identify the central idea of theme:

The purpose here is to extract the essence of what the written material is trying to convey. For
example, you might want to identify the major finding in an experimental article in a journal, or
the core issue of a discussion paper.

(vi) To develop a detailed and critical understanding:

On many occasions, you will need to master fully the material in a book, journal article or
manual so that we can evaluate its arguments, perspective, and/or evidence. This will require us
to:
 Read the material thoroughly.
 Make effective and relevant notes.
 Keep an open mind by being aware of your own ideas and opinions regarding the issues
involved.
TYPES OF READING

It’s important to know the different types of reading skills to make the most of what we are
reading.
EXTENSIVE READING:
Extensive reading is one of the methods of reading that people use for relaxation and pleasure.
This method is adopted when the purpose is to enjoy the reading experience. It places no burden
upon the reader and due to its indulgent nature, it is seldom used if the text isn’t enjoyable.
This is one of the methods of reading that occurs naturally. It’s how we’ve read as a child and
while growing up.
This method of reading helps us understand words in context and enriches our vocabulary.

INTENSIVE READING:
Among the different types of reading skills, intensive reading is used when we want to read
carefully by paying complete attention to understand every word of the text. It is where we
would examine and decipher each unfamiliar word or expression.
As the term states, intensive means in-depth. This reading method is especially used while
reading academic texts, where the goal is to prepare for an exam or to publish a report. This
method helps retain information for much longer periods.

SCANNING:
Imagine if someone went to the Louvre museum only to see the Mona Lisa. He/she would
quickly walk through all the corridors and rooms merely glancing at the walls until they have
found it. Scanning is quite similar to that. It is one of those kinds of reading where we read to
search for a particular piece of information. Our eyes quickly skim over the sentences until we
find it. We can use this method when we don’t need to go deep into the text and read every word
carefully. Scanning involves rapid reading and is often used by researchers and for writing
reviews.

SKIMMING:
Through this method, we try to understand the text in short. Though one saves a lot of time
through this method, one will gain only a shallow understanding of the text. Skimming is a great
way to get a broad idea of the topic being discussed. This method is generally used to judge
whether the information is useful or not. A good example of this is picking up a magazine and
flipping through the pages. We take in only the headings or the pictures to get a broad idea of
what the magazine covers.

CRITICAL READING:
Among the different types of reading strategies, critical reading has a special place. Here, the
facts and information are tested for accuracy. We take a look at the ideas mentioned and analyze
them until we reach a conclusion. We would have to apply our critical faculties while using this
method. Critical reading is often used when reading the news on social media, watching
controversial advertisements, or reading periodicals.
Various types of reading lead to different outcomes. Choosing the right one can be instrumental
in furthering your goals. Further, diversifying our reading habits to include different types of
reading will enable us to become a better writer and speaker.

TECHNIQUES FOR EFFECTIVE READING

Reading Techniques or Styles are the following:

 Scanning.
 Skimming.
 Active Reading.
 Detailed.
 Speed.
 Structure-Proposition-Evaluation
 Survey-Question-Read-Recite-Review.
Reading is a great habit that can change human life significantly. It can entertain us; amuse us
and enrich us with knowledge and experiences narrated. There exist some reading techniques,
which if mastered at a growing stage can help us, be better and far more comprehensive readers.
These skills might not necessarily be learned as rigid theories or rules but if understood well
once they can definitely enhance the reading skills and increase the quality and quantity of
output that we get from after reading.
The followings are seven styles/techniques of reading used in different situations:
1. Reading Technique-Scanning
Scanning through the text is a reading strategy that is used for getting some specific points by
looking at the whole text. For highlighting the important points of a book the readers can skim
through the summary or the preface or the beginning and end chapters of that book.
For example,
This technique is used for looking up a name from the telephone guidebook

2. Reading Technique–Skimming
This reading technique is used for getting the gist of the whole text lead. We generally use this
technique at the time of reading a newspaper or magazine. Under this technique, we read quickly
to get the main points and skip over the detail. It is useful in getting a preview of a passage
before reading it in detail or reviving understandings of a passage after reading it in detail.

3. Active Reading Style

Active reading aims to get an in-depth understanding of the text. Under this technique, the reader
actively involved with the text while reading it. Getting in-depth knowledge of the text at hand is
not possible by reading to skim through or scan through the text.

4. Detailed Reading
This technique is used for extracting information accurately from the whole text. Under this
technique, we read every word for understanding the meaning of the text. In this careful reading,
we can skim the text first for getting a general idea and then go back to read in detail. We can use
a dictionary to find the meaning of every unfamiliar word.

5. Speed Reading
Speed-reading is actually a combination of various reading methods. The aim of speed-reading is
basically to increase the reading speed without compromising the understanding of the text
reading. Some of the strategies used in speed reading are as follows:
 Identifying words without focusing on each letter;
 Not to sounding-out all words;
 Not sub-vocalizing some phrases;
 Spending less time on some phrases than others;
 Skimming small sections.
6. Structure-Proposition-Evaluation
This is an interesting reading technique suggested by Mortimer Adler in his book How to Read a
Book. This reading technique is mainly applicable to non-fiction writing. This technique
suggests reading as per the three following patterns:
 Studying the structure of the work;
 Studying the logical propositions made and organized into chains of inference;
 Evaluation of the merits of the arguments and conclusions.

7. Reading Techniques: Survey-Question-Read-Recite-Review

This method aims to facilitate a clear understanding of the text that the reader would be able to
teach whatever he has learned during the process of reading. The process involves five different
steps, which are as follows:
 Survey
The survey involves getting a quick idea of the whole writing piece. For example, reading
the introduction or summary of a book will be enough to get an idea of that book.
 Question
We are not just reading the words or looking at the words but are actually trying to make
out the underlying meaning of the text. So we should prepare questions in our mind and
look for the answers while reading the text.
 Read
The reader should read selectively if they are looking for any specific.
 Recite
The reader should answer the questions in his own words using only the keywords that
are required to sum up the complete idea.
 Review
The reader should review the entire things in his mind.

IMPROVING COMPREHENSION
Reading comprehension requires motivation, mental frameworks for holding ideas, concentration
and good study techniques. Here are some suggestions.
Develop a broad background.
Broaden your background knowledge by reading newspapers, magazines and books. Become
interested in world events.
Know the structure of paragraphs.
Good writers construct paragraphs that have a beginning, middle and end. Often, the first
sentence will give an overview that helps provide a framework for adding details. Also, look for
transitional words,
Phrases or paragraphs that change the topic.
Identify the type of reasoning. Does the author use cause and effect reasoning, hypothesis, model
building, induction or deduction, systems thinking?
Anticipate and predict.
Really smart readers try to anticipate the author and predict future ideas and questions. If you're
right, this reinforces your understanding. If you're wrong, you make adjustments quicker.
Look for the method of organization.
Is the material organized chronologically, serially, logically, functionally, spatially or
hierarchical? Create motivation and interest. Preview material, ask questions, discuss ideas with
classmates. The stronger your interest, the greater your comprehension.
Pay attention to supporting cues.
Study pictures, graphs and headings. Read the first and last paragraph in a chapter, or the first
sentence in each section.
Highlight, summarize and review.
Just reading a book once is not enough. To develop a deeper understanding, you have to
highlight, summarize and review important ideas.
Build a good vocabulary.
For most educated people, this is a lifetime project. The best way to improve your vocabulary is
to use a dictionary regularly. You might carry around a pocket dictionary and use it to look up
new words. Or,you can keep a list of words to look up at the end of the day. Concentrate on
roots, prefixes and endings.
Use a systematic reading technique like SQR3.
Develop a systematic reading style, like the SQR3 method and make adjustments to it, depending
on priorities and purpose. The SQR3 steps include Survey, Question, Read, Recite and Review.
Monitor effectiveness.
Good readers monitor their attention, concentration and effectiveness. They quickly recognize if
they've missed an idea and backup to reread it.
READING COMPONENT – A STORY OF BANKRUPTCY
Passage 1

In many Western societies, modern bankruptcy laws have undergone a shift away from a focus
on punishment and toward a focus on bankruptcy as a remedy for individuals and corporations in
financial trouble-and, perhaps unexpectedly for their creditors. This shift has coincided with an
ever increasing reliance on declarations of bankruptcy by individuals and corporations with
excessive debt, a trend that has drawn widespread criticism. However, any measure seeking to
make bankruptcy protection less available would run the risk of preventing continued economic
activity of financially troubled individuals and institutions. It is for this reason that the
temptation to return to a focus on punishment of individuals or corporations that become
insolvent must be resisted. Modern bankruptcy laws, in serving the needs of an interdependent
society, serve the varied interests of the greatest number of citizens.

The harsh punishment for insolvency in centuries past included imprisonment of individuals and
dissolution of enterprises, and reflected societies' beliefs that the accumulation of excessive debt
resulted either from debtors' unwillingness to meet obligations or from their negligence.
Insolvent debtors were thought to be breaking sacrosanct social contracts; placing debtors in
prison was considered necessary in order to remove from society those who would violate such
contracts and thereby defraud creditors. But creditors derive little benefit from imprisoned
debtors unable to repay even a portion of their debt. And if the entity to be punished is a large
enterprise, for example, an auto manufacturer, its dissolution would cause significant
unemployment and the disruption of much-needed services.

Modern bankruptcy law has attempted to address the shortcomings of the punitive approach.
Two beliefs underlie this shift: that the public good ought to be paramount in considering the
financial insolvency of individuals and corporations; and that the public good is better served by
allowing debt-heavy corporations to continue to operate, and indebted individuals to continue to
earn wages, than by disabling insolvent economic entities. The mechanism for executing these
goals is usually a court-directed reorganization of debtors' obligations to creditors. Such
reorganizations typically comprise debt relief and plans for court-directed transfers of certain
assets from debtor to creditor. Certain strictures connected to bankruptcy-such as the fact that
bankruptcies become matters of public record and are reported to credit bureaus for a number of
years-may still serve a punitive function, but not by denying absolution of debts or financial
reorganization. Through these mechanisms, today's bankruptcy laws are designed primarily to
assure continued engagement in productive economic activity, with the ultimate goal of restoring
businesses and individuals to a degree of economic health and providing creditors with the best
hope of collecting.
Q1. The primary purpose of the passage is to

(A) offer a critique of both past and present approaches to insolvency

(B) compare the practices of bankruptcy courts of the past with those of bankruptcy courts of the
present
(C) criticize those who would change the bankruptcy laws of today
(D) re-examine today's bankruptcy laws in an effort to point to further improvements
(E) explain and defend contemporary bankruptcy laws.
Ans. E

Q2. In stating that bankruptcy laws have evolved "perhaps unexpectedly" (1st para) as a remedy
for creditors, the
author implies that creditors

(A) are often surprised to receive compensation in bankruptcy courts

(B) have unintentionally become the chief beneficiaries of bankruptcy laws
(C) were a consideration, though not a primary one, in the formulation of bankruptcy laws
(D) are better served than is immediately apparent by laws designed in the first instance to
provide a remedy for debtors
(E) were themselves active in the formulation of modern bankruptcy laws.
Ans. D

Q3.Which one of the following, if true, would most weaken the author's argument against harsh
punishment for debtors?

(A) Extensive study of the economic and legal history of many countries has shown that most
individuals who served prison time for bankruptcy subsequently exhibited greater economic
responsibility.
(B) The bankruptcy of a certain large company has had a significant negative impact on the local
economy even though virtually all of the affected employees were able to obtain similar jobs
within the community.
(C) Once imprisonment was no longer a consequence of insolvency, bankruptcy filings increased
dramatically, then levelled off before increasing again during the 1930s.
(D) The court-ordered liquidation of a large and insolvent company's assets threw hundreds of
people out of work, but the local economy nevertheless demonstrated robust growth in the
immediate aftermath.
(E) Countries that continue to imprison debtors enjoy greater economic health than do
comparable countries that have ceased to do so.

Ans. E

Q4. Express the main point of the passage in your own words.
Sample ans. The modern trend in bankruptcy law away from punishment and toward the
maintenance of economic activity serves the best interests of society and should not be
abandoned.

Q5. What is the author's attitude toward the evolution of bankruptcy law?
Sample ans, The author is in approval of changes that have been made to inefficient laws as
today's bankruptcy laws are designed primarily to assure continued engagement in productive
economic activity, with the ultimate goal of restoring businesses and individuals to a degree of
economic health and providing creditors with the best hope of collecting.

Q6. What implications did the traditional punitive bankruptcy law had on debtors and creditors?
Sample ans. Harsh punishment for insolvency in centuries past included imprisonment of
individuals which were deemed necessary in order to remove from society those who would
violate such contracts and thereby defraud creditors. Creditors derive little benefit from
imprisoned debtors unable to repay even a portion of their debt. Dissolution of enterprises would
cause significant unemployment and the disruption of much-needed services.

Q7. What could have been the possible reasons for undergoing such changes in the bankruptcy
laws?
Sample ans. Bankruptcy laws underwent change because the traditional approach proved
inadequate and contrary to the needs of society. It would be better for the economic health if the
public good is continued to be served by allowing debt-heavy corporations to continue to
operate.
READING COMPONENT – A STORY OF BANKRUPTCY
Passage 2

About roughly two-thirds of Indians that don’t have any health insurance, compounding the
problems facing India’s economy as it tries to recover from the shock of a rare contraction this
year. Overcrowded government hospitals with long lines and poor facilities prompt people to
spend out of pocket for better treatment in the private sector.

While the virus has affected the poor across the globe, the impact can be exponentially greater in
countries like India where public spending on health care is among the lowest in the world. The
signs of pain are everywhere: Loans against gold and debt defaults are rising while savings,
vehicle sales, company profits and government revenues are falling.
There has also been a clear shift in consumer spending from clothes, shoes and personal care
goods toward pharmaceuticals, as medication shortages and panic prompted many Indians to sell
motorcycles, gold and even their farm animals to pay for life-saving treatment on the black
market. The soaring expenses included vials of the antiviral drug as well as private ambulances
that ferried desperate families scouring for hospital beds and oxygen cylinders.
Even before the pandemic struck, India’s out-of-pocket expenses on health care were among the
highest in the world, accounting for about 60% of total health expenditure. Public health
spending — including both the federal and state governments — hovered well below 2% of
gross domestic product, a number that rises to 3.5% when including the private sector. That
compares with 5.4% of GDP in China and a global average of nearly 10%, according to World
Bank data.
While there’s no data on how many Indians have been pushed to financial ruin by medical debt,
researchers at Azim Premji University found that the virus erased decades of gains by pushing an
additional 230 million — more than the entire population of Pakistan — into poverty last year.
More than 90% of people borrowed a median amount of 15,000 rupees during the pandemic,
they said, adding that the impact is expected to persist.
Loans taken to meet out-of-pocket expenses on health can be more damaging than other
household debt because the illness “limits one’s ability to work, leading to depletion of
household savings and unanticipated economic shocks,” said Sunil Kumar Sinha, an economist
with India Ratings and Research.
A study in April and May among a poor community in the eastern state of Jharkhand that found
58% had already borrowed money and 11% had sold assets during the pandemic, according to
John Paul, director of the Centre for Rural Development at The Nudge Foundation. “With no
fallback options like savings or insurance, even basic necessities like food have become a
challenge to poor households,” he said.

Deep in India’s hinterland the crisis is even more dire, with villagers being forced to reduce their
food intake in order to pay for treatment.

Q1. What is the main theme of the passage?

Sample ans. The additional burden to health crisis from covid is the emerging and persisting
medical debts.

Q2. How has the rising private health expenditures due to covid increased other financial
burdens?
Sample ans. Loans against gold and debt defaults are rising while savings, vehicle sales,
company profits and government revenues are falling.
Q3. What are the various evidences of the Covid induced financial burdens?
Sample ans. While there’s no data on how many Indians have been pushed to financial ruin by
medical debt, researchers at Azim Premji University found that the virus erased decades of gains
by pushing an additional 230 million — more than the entire population of Pakistan — into
poverty last year. More than 90% of people borrowed a median amount of 15,000 rupees during
the pandemic, they said, adding that the impact is expected to persist. A study in April and May
among a poor community in the eastern state of Jharkhand that found 58% had already borrowed
money and 11% had sold assets during the pandemic, according to John Paul, director of the
Centre for Rural Development at The Nudge Foundation.
Q4. How is the public health spending of India as compared to other developing nations?
Sample ans. Even before the pandemic struck, India’s out-of-pocket expenses on health care
were among the highest in the world, accounting for about 60% of total health expenditure.
Public health spending — including both the federal and state governments — hovered well
below 2% of gross domestic product, a number that rises to 3.5% when including the private
sector. That compares with 5.4% of GDP in China and a global average of nearly 10%,
according to World Bank data.

Q5. What implications did the Covid have on consumption patterns?

Sample ans. There has also been a clear shift in consumer spending from clothes, shoes and
personal care goods toward pharmaceuticals, as medication shortages and panic prompted many
Indians to sell motorcycles, gold and even their farm animals to pay for life-saving treatment on
the black market
Q6. What could the feasible solutions in curbing the financial losses in addition to loss of lives
due to Covid?
Sample ans. Increasing public health spending and coverage of health insurance in India. Better
health facilities and management to curb the black marking and inefficiency in health
infrastructure.

READING COMPONENT – A STORY OF BANKRUPTCY

Passage 3

In the end, the hoped-for knight-in-shining armor never arrived and Jet Airways is now in
insolvency court. This marks the last act in a long-winded saga that saw the beleaguered airline
and its stakeholders lurch from despondency to hope to gloom once again. The debt-laden airline’s
troubles began when it defaulted on a loan last December. Hectic salvage attempts at the airline
since then have come to naught. Thousands of employees and many operational creditors may end
up being the biggest losers in the fiasco.

Among the many factors that led to this state of affairs was the promoter Naresh Goyal’s
intransigence on valuation and not ceding majority control — till he was eventually forced out in
end-March. Then came the volte-face by the SBI-led lender consortium on its emergency funding
commitment of Rs. 1,500 crores, which scuttled the bidding process. The airline’s already
truncated operations rapidly unraveled and it stopped flying mid-April. Jet’s assets — prized
airport slots, valuable fleet, trained employees — were up for grabs and the competition has since
moved in for the kill. Not surprisingly, most potential suitors for Jet Airways backed off and just
one conditional bid was received for a minority stake from strategic partner Etihad Airways. Later,
the Hinduja Group also threw its hat into the ring. But lenders seem to have found these offers
unappealing and have now decided to refer Jet to the National Company Law Tribunal (NCLT)
for insolvency proceedings.

Higher value could have been salvaged for all of Jet’s stakeholders, had the lenders acted sooner
and more decisively. The saga as it has played out has been beset with avoidable delays and wrong
signals. First, Naresh Goyal was given an inordinately long rope by the lenders which worked to
the detriment of everyone else. Thankfully the prospect of a backdoor entry by the promoter was
thwarted. But the lenders’ decision to put off the IBC route in favor of a majority equity stake for
themselves is difficult to explain. This leads one to wonder whether the need to avoid the bad
optics of job losses and fare hikes in the election season was at play. Debt restructuring was a more
pragmatic course if they were worried about long delays under IBC but that required lenders to
follow through of their emergency funding commitment. It isn’t clear what really changed in a
fortnight that the lenders backtracked on that commitment. In the bargain, almost everyone except
Jet’s rivals has lost value. While the creative destruction cycle in businesses should be allowed to
play out, the process should be fair, transparent and above reproach. The lenders now say that
under the IBC, it is possible to give potential investors the exemptions they seek from SEBI norms.
This offers a glimmer of hope that some resolution, even if sub-optimal, may be possible. But
stakeholders should keep expectations low, given that the resolution of cases so far referred under
IBC have been fraught with long delays and disputes.

Q1. How would you describe the opinion of the author about the IBC proceedings?
Sample ans. The author is not at all optimistic about the IBC proceedings in the country since it
takes a lot of time and is not always free from disputes.

Q2. What have been attributed to the failure of the Jet Airways, as per the given passage?
Sample ans. The management of the company could have been handled in a better manner by the
lenders without any valid reason.
The lenders could not take decisions when required since they have not applied their best minds
to solve the crisis.

Q3. What is the reason that the lenders have not accepted the bids received to acquire Jet
Airways?
Sample ans. The lenders have not found the bids accepted in line with their expectations and that
is why they decided against accepting the same.

Q4. Who could be the biggest losers in the bankruptcy case of the airlines?
Sample ans. Thousands of employees and many operational creditors may end up being the
biggest losers in the fiasco.

Q5. How has the main culprit in the Jet Airways saga played out their roles, as described by the
author?
Sample ans. The saga as it has played out has been beset with avoidable delays and wrong
signals. Out of everyone involved in this downhill story of the airlines from jet airways
promoters, the bidders to SEBI, it is the lenders who could not take decisions when required
since they have not applied their best minds to solve the crisis.

Q6. What could be the possible solutions for reducing bankruptcy in the country?
Sample ans. Some feasible steps by all parties involved would better the situation of bankruptcy
in India. The promoters of the company, the bidders, and the lenders could efficiently function,
along with SEBI and tribunal courts for IBC proceedings reducing the delays and shocks would
help mitigate problems.