Industry: UPSC Previous Year Questions (Indian Economy)

Explanation

Statement 1 is incorrect: The National Rail Plan aims to create a ‘future ready’ railway system by 2030, not 2028. The objective of the Plan is to create capacity ahead of demand, which in turn would also cater to future growth in demand right up to 2050 and also increase the modal share of Railways to 45% in freight traffic and to continue to sustain it.

Statement 2 is incorrect: ‘Kavach’ is an indigenously developed Automatic Train Protection (ATP) system by Indian Railways, not in collaboration with Germany. The name "Kavach," meaning "shield" in Hindi, reflects its purpose of delivering robust protection and upholding top safety standards in railway operations. With its certification at the highly regarded Safety Integrity Level 4 (SIL-4), Kavach demonstrates outstanding reliability.

Statement 3 is correct: Radio Frequency Identification (RFID) tags are placed throughout the entire track length to enable the Kavach system to track train positions and detect any potential safety issues along the route.

Explanation

Statement 1 is incorrect: Under Section 15 of the Mines and Minerals (Development and Regulation) Act, 1957 (MMDR Act), State Governments do have the power to make rules for regulating the grant of mineral concessions in respect of minor minerals within their territories. This includes framing rules for mining leases, quarry leases, and other concessions.

Statement 2 is correct: The Central Government has the authority to declare a mineral as a ‘minor mineral’ by notification in the Official Gazette as per Section 3(e) of the Mines and Minerals (Development and Regulation) Act, 1957 (MMDR Act).

Explanation

Statement 1 is incorrect: The United States is the largest producer of ethanol in the world, accounting for about 52% of global production, while Brazil produces about 28%. For example, in 2024, the U.S. produced 16,219 million gallons, and Brazil produced 8,780 million gallons. Brazil was the top producer until 2005, but since then, the U.S. has consistently outproduced Brazil.

Statement 2 is correct: In the U.S., the principal feedstock for ethanol production is made corn. In Brazil, sugarcane is the main feedstock for ethanol production.

Explanation

Pair 1 is incorrect: The National Automotive Board does not function under the Ministry of Commerce and Industry. It is under the Ministry of Heavy Industries, which oversees policies related to the automotive sector, including electric mobility and auto testing infrastructure.

Pair 2 is incorrect: The Coir Board is not under the Ministry of Heavy Industries. It functions under the Ministry of Micro, Small and Medium Enterprises (MSME) and promotes the coir industry, especially in coastal regions of India.

Pair 3 is incorrect: The National Centre for Trade Information (NCTI) is not under the Ministry of Micro, Small and Medium Enterprises. It is a joint initiative of the Ministry of Commerce and Industry and the India Trade Promotion Organisation (ITPO) for facilitating trade information services.

Explanation

The Petroleum and Natural Gas Regulatory Board (PNGRB) was established by the PNGRB Act, 2006, with a very specific mandate. Its core purpose is to regulate the downstream and midstream segments of the petroleum and natural gas sector in India. This is done to promote competition, protect consumer interests, and ensure the orderly growth of the market.

1. Production of crude oil:

Why it’s NOT regulated by PNGRB: This falls under the upstream segment of the oil and gas industry. "Upstream" refers to the exploration for and production of crude oil and natural gas. This segment involves geological surveys, drilling, and extracting the hydrocarbons from the ground. The regulation of these activities, including licensing, production sharing contracts, and resource management, is primarily handled by the Directorate General of Hydrocarbons (DGH) and the Ministry of Petroleum and Natural Gas directly. The PNGRB was specifically created to handle the post-production aspects.

2. Refining, storage, and distribution of petroleum:

Why it IS regulated by PNGRB: These are crucial downstream and midstream activities. Refining: While the actual process of refining crude oil into various products (like petrol, diesel, kerosene) might have its own technical standards, the PNGRB’s role often comes into play concerning the transportation of crude to refineries and the movement of refined products from refineries. It ensures fair access to transportation infrastructure like pipelines. • Storage: The PNGRB regulates the establishment and operation of storage facilities for petroleum and its products. This includes laying down technical and safety standards, ensuring that storage infrastructure is adequate and managed safely. • Distribution: This is a major area of PNGRB’s focus. It regulates the setting up, operation, and expansion of pipelines for the transportation of petroleum and petroleum products across the country. It also plays a key role in regulating city gas distribution (CGD) networks that supply piped natural gas (PNG) to homes and compressed natural gas (CNG) for vehicles. The aim is to ensure non-discriminatory access to such infrastructure.

3. Marketing and sale of petroleum products:

Why it IS regulated by PNGRB: This is another significant downstream activity. The PNGRB is tasked with:

Regulating the marketing and sale of notified petroleum products and natural gas. Ensuring fair play and competition in the market. Protecting the interests of consumers by monitoring pricing and preventing anti-competitive practices. Setting standards for service obligations for marketing entities.

4. Production of natural gas:

Why it’s NOT regulated by PNGRB: Similar to crude oil production, natural gas production is an upstream activity involving exploration and extraction. As per the PNGRB Act, these activities fall outside the Board’s jurisdiction and are regulated by the DGH and the Ministry. The PNGRB’s role begins once the gas has been produced and enters the transportation, processing, and distribution network.

Explanation

Statement 1 is correct: According to the Companies Act, 2013, CSR activities must benefit society at large and not be directed toward the company’s employees or their families. Activities that serve the company’s business interests or are part of its normal operations are also excluded from being considered CSR.

Statement 2 is incorrect: The CSR rules mandate that eligible companies spend at least 2% of their average net profits from the preceding three financial years on CSR activities. This is a clearly defined minimum spending requirement under Section 135 of the Companies Act, 2013.

Explanation

Investments can be categorized into tangible and intangible assets. Tangible assets have a physical presence, while intangible assets lack a physical form. Intangible assets derive their value from intellectual or legal rights.

Option (c) is correct:

Brand recognition is an intangible asset because it does not have a physical form but contributes significantly to a company’s value. Strong brand recognition enhances consumer trust, customer loyalty, and market competitiveness. Example: Coca-Cola’s brand value is estimated at billions of dollars, despite not being a physical asset. Intellectual property (patents, trademarks, copyrights, trade secrets) is intangible and provides significant competitive advantage. Example: Patents for pharmaceutical drugs are valuable intangible investments for pharma companies. Mailing List of Clients is an intangible asset because it enhances marketing capabilities and customer retention. Example: E-commerce companies leverage customer mailing lists for targeted marketing. Inventory consists of physical goods that a company holds for sale or production. It is a tangible asset because it has a physical form and can be seen, touched, and measured. Example: A company like Reliance Retail holds inventory in the form of clothes, electronics, and groceries, which are physical goods. The Companies Act, 2013 and accounting standards (Ind AS) classify inventory as a tangible asset.

Explanation

Statement I is incorrect: As of 2022 India’s share in global merchandise exports was approximately 1.8% and not 3.2%. This figure has seen a modest increase from 1.69% in 2014 to 1.82% in 2022.

Statement II is correct: The Production-Linked Incentive (PLI) scheme was introduced by the Indian government in 2020 to boost domestic manufacturing across various sectors. Both local and foreign companies have actively participated in this initiative including major global players like Dell, HP, Foxconn, Lenovo, etc.

Explanation

Statement 1 is incorrect: The MSMED Act, 2006 originally defined medium enterprises as those with investments in plant and machinery between 5 crore and 10 crore. As per the latest guidelines of 2020 a medium enterprise presently is defined as one where the investment in plant and machinery or equipment does not exceed 50 crore and turnover does not exceed 250 crore and not 15 crore to 25 crore. The following table provides the details of revised limits:

Category Old Capital Old Turnover New Capital New Turn-over Micro 25 Lakh 10 Lakh 1 Crore 5 Crore Small 5 Crore 2 Crore 10 Crore 50 Crore Medium 10 Crore 5 Crore 50 Crore 250 Crore

Statement 2 is correct: The Reserve Bank of India’s Master Directions on Priority Sector Lending (PSL) specify that bank loans to Micro, Small, and Medium Enterprises are eligible for classification under the priority sector but subject to certain conditions. While loans to micro and small enterprises are fully eligible, loans to medium enterprises are considered under PSL only up to a certain limit. Specifically, bank loans up to 10 crore per borrower to medium enterprises engaged in providing or rendering of services are eligible for PSL classification.

Explanation

Statement 1 is incorrect: Under India’s Foreign Direct Investment (FDI) policy, foreign-owned e-commerce firms operating as marketplace models (e.g., Amazon, Flipkart) can-not sell their own goods. They are only allowed to provide a platform for third-party sellers.

Statement 2 is correct: The FDI policy limits the degree to which foreign-owned e-commerce firms can own or control sellers on their platforms. For example, a single seller cannot account for more than 25% of the total sales on the platform(as per FDI policy).