Two statements are followed by three Conclusions I, II and III. You have to consider the statements to be true, even if they seem to be at variance from commonly known facts. You are to decide which of the given conclusions can definitely be drawn from the given statements and indicate your answer accordingly. Statements: I. After a Pay Commission bonanza of 2% hike in dearness allowance in March, central government employees and pensioners can expect another round of salary increase with the government set to modify the index and base year for calculating dearness allowance.  II. The labour ministry is working on a new series of consumer price index for industrial workers (CPI-IW), which is used to determine dearness allowance (DA).  Conclusions: I. DA is a cost of living adjustment allowance paid to government employees, public sector employees and pensioners in the country. It is calculated as a percentage of an employee’s basic salary to mitigate the impact of inflation on people.  II. Since theindex is used to determine dearness allowance of all government employees and industrial workers there may be significant financial implication. III. The trend so far is that the weightage of transport, healthcare and housing has gone up many fold in the new series in the monthly expenditure of an industrial worker, especially consumption of petrol and diesel with the addition of cars to it, while there is decline in overall food basket which is being diversified.?

Option 4 : Neither conclusion 1 nor 3 follows

The correct answer is option 4, i.e. Neither conclusion 1 nor 3 follows, i.e. Only conclusion 2 follows.

In this type of question, conclusion is not specifically mentioned. It needs to be deduced from the given statements.

From both the statements, we infer that DA is expected to increase, a move which will help government employees and pensioners and the labour ministry is working on a new series of consumer price index for industrial workers in order to provide the benefit to the Industrial workers also. From the conclusions stated, it is evident that first conclusion can be rejected as it is a general statement regarding how DA is calculated and is in no manner a conclusion that can be made based on the information stated. Last conclusion can also be rejected as it introduces a new aspect of ‘consumption of petrol and diesel’ which is not evident from the information stated.

Second conclusion though, not a perfect conclusion but is in the same direction as the given information. It captures the general aspect of the hike which will benefit the employees and workers and this might result in increase in fiscal implications. Since, we don’t have ‘none of these’ as an option choice, second conclusion is the most appropriate conclusion as compared to the rest of the choices.