Q31. A Special Economic Zone (SEZ) is deemed to be a foreign territory for the purposes of:
Industrial Growth, Policy Reforms and LPG: RAS Prelims MCQs
91 RAS Prelims MCQs on industrial growth, policy reforms and the LPG reforms of 1991 cover the Industrial Policy Resolutions, the licensing system, the 1991 balance of payments crisis, privatisation and disinvestment. The MSME definition and Make in India are asked as facts and statements, and the explanations tie each policy to its year.
Practice questions based on the RPSC RAS Prelims syllabus. They follow the exam pattern but are not past-paper questions.
Showing 31–40 of 91 questions
Q32. Read the following statements regarding Special Economic Zones (SEZs) in India:
I. The SEZ Act was passed by Parliament in 2005.
II. SEZ units enjoy 100% income tax exemption on export income for the first five years.
III. Supplies from Domestic Tariff Area (DTA) to a SEZ are treated as physical exports.
IV. State governments have no role in the establishment of SEZs.
V. SEZs are exempt from Minimum Alternate Tax (MAT) indefinitely.
Which of the statements given above are correct?
I. The SEZ Act was passed by Parliament in 2005.
II. SEZ units enjoy 100% income tax exemption on export income for the first five years.
III. Supplies from Domestic Tariff Area (DTA) to a SEZ are treated as physical exports.
IV. State governments have no role in the establishment of SEZs.
V. SEZs are exempt from Minimum Alternate Tax (MAT) indefinitely.
Which of the statements given above are correct?
Explanation
The Special Economic Zones Act of 2005 provides the legal framework for the establishment and operation of SEZs in India. Units within these zones benefit from a 100% income tax exemption on export income for the first five years. Furthermore, any supplies made from the Domestic Tariff Area to an SEZ unit are treated as physical exports, making them eligible for export incentives.
Q33. The phenomenon of ‘jobless growth’ in the post-reform Indian economy refers to:
Explanation
Jobless growth is an economic phenomenon where the Gross Domestic Product grows at a high rate, but this growth does not result in a proportional increase in employment opportunities. In the post-reform Indian context, this has often been observed as growth driven by capital-intensive and technology-driven sectors. Consequently, while the economy expands, the labor force does not experience a significant rise in formal jobs.
Q34. Identify the incorrect statement regarding the pattern of industrial growth in India post-1991.
Explanation
The post-1991 industrial landscape in India was marked by significant structural shifts. The service sector’s contribution to GDP grew rapidly, outpacing manufacturing, and there was a substantial influx of foreign technology. Crucially, the public sector’s monopoly in many core industries, such as telecommunications, was ended to allow private competition. Therefore, stating that the public sector monopoly in telecommunications was retained is incorrect.
Q35. Consider the following constraints faced by the Indian industrial sector post-liberalisation:
I. Inadequate infrastructure facilities
II. Stringent labor laws
III. Lack of access to credit for MSMEs
IV. Over-protection from foreign competition
Which of the combinations given above incorrectly identifies the constraints?
I. Inadequate infrastructure facilities
II. Stringent labor laws
III. Lack of access to credit for MSMEs
IV. Over-protection from foreign competition
Which of the combinations given above incorrectly identifies the constraints?
Explanation
Following liberalisation, the Indian industrial sector faced several genuine challenges, including inadequate infrastructure, rigid labor laws, and limited credit access for Micro, Small and Medium Enterprises. However, over-protection from foreign competition is not a constraint faced after 1991; rather, it was a characteristic of the pre-reform era. Post-liberalisation, industries actually struggled with increased exposure to global competition due to reduced tariffs.
Q36. The ‘Make in India’ initiative was launched by the Government of India in which year?
Explanation
The Make in India initiative was launched in 2014 to make India a manufacturing hub, with 25 focus sectors.
Q37. Which of the following is not one of the four key pillars of the Make in India initiative?
Explanation
The Make in India initiative is built upon four primary pillars to facilitate investment and innovation. These include New Processes, New Infrastructure, New Sectors, and a New Mindset. The objective is to move away from bureaucratic hurdles and toward a more collaborative relationship with industry. Protectionism, which involves restricting trade to protect domestic industries, is not a pillar; instead, the program promotes global competitiveness.
Q38. A major quantitative target of the Make in India initiative was to increase the share of manufacturing in the country’s GDP to what percentage by 2025?
Explanation
One of the central quantitative goals of the Make in India initiative is to significantly increase the manufacturing sector’s contribution to the economy. The government set a target to raise the share of manufacturing in India’s Gross Domestic Product to 25% by 2025. This target aims to drive economic growth and provide employment to the growing workforce by transforming India into a globally competitive manufacturing destination.
Q39. Which of the following best describes the Production Linked Incentive (PLI) scheme?
Explanation
The Production Linked Incentive scheme is a key policy tool designed to boost domestic manufacturing and attract large-scale investments. It provides financial incentives to eligible companies based on their incremental sales of products manufactured in India over a base year. This scheme encourages companies to increase their production capacity and exports, thereby strengthening the local supply chain and making Indian goods more competitive.
Q40. Match List I with List II and select the correct answer.
| Policy/Scheme | Core Objective |
|---|---|
| A. Startup India | i. Promote domestic manufacturing and FDI |
| B. PLI Scheme | ii. Nurture innovation and entrepreneurship |
| C. Make in India | iii. Create export hubs with duty-free enclaves |
| D. SEZ Act | iv. Boost manufacturing capabilities and exports via sales incentives |
Explanation
Various government initiatives target different aspects of industrial growth. Startup India focuses on nurturing innovation and entrepreneurship, while the Production Linked Incentive scheme boosts manufacturing through sales-based incentives. Make in India is a broader push to promote domestic manufacturing and attract foreign direct investment. Additionally, the Special Economic Zones Act was enacted to create specialized export hubs through the development of duty-free enclaves.Answer key for these questions
| Q | Correct answer |
|---|---|
| 31 | (a) Trade operations, duties, and tariffs |
| 32 | (b) I, II and III |
| 33 | (b) High GDP growth driven by capital- intensive sectors without a proportional rise in employment. |
| 34 | (a) The public sector’s monopoly in core industries like telecommunications was completely retained. |
| 35 | (c) IV only |
| 36 | (b) 2014 |
| 37 | (c) New Protectionism |
| 38 | (c) 25% |
| 39 | (d) Financial incentives based on incremental sales of domestic products. |
| 40 | (a) A-ii, B-iv, C-i, D-iii |
Key facts from Industrial Growth, Policy Reforms and LPG
- The Industrial Policy Resolution of 1948 first introduced the mixed economy; the 1956 resolution divided industries into three schedules, with Schedule A reserved for the State.
- The Industries (Development and Regulation) Act, 1951 governed industrial licensing, known as the Licence Raj; the Dutt Committee of 1967 inquired into it.
- The IMF and the World Bank gave India structural adjustment loans in 1991.
- Compulsory licensing today remains for some industries, such as electronic aerospace and defence equipment.
- Transferring ownership and control of a public sector enterprise to the private sector is privatisation; DIPAM manages government investment and public asset management.
- The MSME definition of 2020 uses investment in plant and machinery and annual turnover; Make in India was launched in 2014.
Frequently asked questions
How many RAS Prelims practice MCQs are there on Industrial Growth, Policy Reforms and LPG?
This page has 91 practice MCQs on Industrial Growth, Policy Reforms and LPG (Indian Economy). Each has the correct answer, and most have an explanation.
What did the Industrial Policy Resolution of 1956 do?
It classified industries into three categories: Schedule A for the exclusive responsibility of the State, Schedule B for the State and private sector together, and Schedule C for the private sector. It is called the Economic Constitution of India.
What is privatisation?
The transfer of ownership, management and control of a public sector enterprise to the private sector. It differs from partial disinvestment, where the Government sells only a part of its shares and keeps control.
Which Act governed industrial licensing in India?
The Industries (Development and Regulation) Act, 1951. It required industrial units to get a licence from the Government, and the system came to be known as the Licence Raj until it was dismantled in 1991.