Question

In each of these questions, two statements I and II are given.
These may have a cause and effect relationship or may have independent causes or be the effects of independent causes.
Statement I:
India has lost a staggering $ 462 billion in illicit financial flows due to tax evasion, crime and corruption post - Independence according to a report released by Washington-based Global Financial Integrity.
Statement II:
More than 40% of the FDIs to India originate from Mauritius. Mauritius has now agreed to negotiate and revise the existing Double Taxation Avoidance Agreement (DTAA) with India, as capital gains is exempted from tax in Mauritius and a Mauritian company cannot be taxed in India.

• A. if statement I is the cause and statement II is its effect.
• B. if statement II is the cause and statement I is its effect.
• C. if both the statements I and II are effects of independent causes.
• D. if both the statements I and II are effects of some common cause.

Answer 1

Answer: (C)

if both the statements I and II are effects of independent causes.

Answer 2

These statements address different issues: one relates to illicit financial flows and the other to tax agreements affecting investments. There is no direct cause-and-effect relationship between them; they are independent issues related to India's financial landscape.The correct option is (C): if both the statements I and II are effects of independent causes.