Q41. Which of the following sectors is NOT currently covered under the Production Linked Incentive (PLI) scheme?
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 41–50 of 91 questions
Q42. Consider the following sectors and arrange them in descending order based on their maximum permissible limit of Foreign Direct Investment (FDI) (including both automatic and government routes):
I. Multi-brand retail trading
II. Print Media
III. Telecommunications
Select the correct order:
I. Multi-brand retail trading
II. Print Media
III. Telecommunications
Select the correct order:
Explanation
Foreign Direct Investment limits vary across different sectors in India based on strategic importance. Telecommunications currently allows up to 100% investment through the automatic route. Multi-brand retail trading is permitted up to 51% with prior government approval and specific conditions. Print media, which is considered a sensitive sector regarding information and culture, has a lower maximum permissible limit of 26% under the government route.
Q43. Under the revised 2020 MSME classification, an enterprise is classified as a ‘Medium’ enterprise if:
Explanation
Under the revised 2020 MSME classification, the thresholds for categorization were significantly increased to support business scaling. An enterprise is classified as a ‘Medium’ enterprise if its investment in plant and machinery or equipment does not exceed 50 crore and its annual turnover does not exceed 250 crore. This upward revision allows larger firms to continue enjoying the benefits provided to MSMEs.
Q44. What is the primary role of the Public Sector Undertakings (PSUs) in the post-1991 era in India?
Explanation
In the post-1991 economic era, the role of Public Sector Undertakings has shifted from maintaining a broad monopoly to focusing on strategic and core sectors. PSUs are now expected to operate on a commercial basis, emphasizing efficiency and profitability. Their primary purpose is to manage critical infrastructure where private investment may be insufficient, while competing with private players in other areas of economy.
Q45. Which of the following is an essential criterion for a Central Public Sector Enterprise (CPSE) to be granted ‘Maharatna’ status?
Explanation
To be eligible for the prestigious Maharatna status, a Central Public Sector Enterprise must meet several stringent criteria. It must already hold Navratna status and be listed on the Indian stock exchange with the prescribed minimum public shareholding. Additionally, the company must have a significant global presence and meet specific financial thresholds regarding average annual net profit, net worth, and turnover.
Q46. Given below are two statements, one is labelled as Assertion (A) and the other is labelled as
Reason (R).
Assertion (A): The government introduced the ‘Navratna’ and ‘Miniratna’ schemes for selected Public Sector Enterprises.
Reason (R): The objective was to grant them enhanced financial and operational autonomy to compete globally.
Which of the following is correct?
Reason (R).
Assertion (A): The government introduced the ‘Navratna’ and ‘Miniratna’ schemes for selected Public Sector Enterprises.
Reason (R): The objective was to grant them enhanced financial and operational autonomy to compete globally.
Which of the following is correct?
Explanation
The government introduced schemes like Navratna and Miniratna to categorize high-performing public sector enterprises. The primary objective of these designations is to grant selected companies greater financial and operational autonomy. This empowerment allows them to make critical investment and expansion decisions without frequent government approvals. Consequently, these PSUs can respond more effectively to market dynamics and compete more efficiently with private entities.
Q47. Which of the following CPSEs does NOT hold the ‘Maharatna’ status (as of early 2024 classifications)?
Explanation
As of recent classifications, several major PSUs like BHEL, Indian Oil Corporation, and SAIL have been granted Maharatna status due to their significant financial performance and scale of operations. Hindustan Aeronautics Limited, while a crucial enterprise in the defense and aerospace sector with Navratna status, did not hold the Maharatna designation in early 2024. The status is periodically reviewed based on benchmarks.
Q48. Match List I with List II and select the correct answer.
| PSU Status | Financial Autonomy Limit for Investment without Govt Approval |
|---|---|
| A. Maharatna | i. Up to 500 crore |
| B. Navratna | ii. Up to 1000 crore or 15% of net worth |
| C. Miniratna Category-I | iii. Up to 300 crore or 50% of net worth |
| D. Miniratna Category-II | iv. Up to 5,000 crore or 15% of net worth |
Explanation
The financial autonomy granted to public sector enterprises depends on their specific status. Maharatna companies can invest up to 5,000 crore or 15% of their net worth in a single project without prior government approval. Navratna companies have a limit of 1,000 crore. Miniratna Category-I enterprises are allowed up to 500 crore, while Miniratna Category-II firms have an investment autonomy limit of 300 crore.
Q49. The Delhi-Mumbai Industrial Corridor (DMIC) is a mega infrastructure project being developed with the financial and technical assistance of which country?
Explanation
The Delhi-Mumbai Industrial Corridor is one of the world’s largest infrastructure projects, aimed at developing a high-tech industrial zone along the Western Dedicated Freight Corridor. This project is being implemented with significant financial and technical assistance from the Government of Japan. The collaboration involves developing smart cities and industrial hubs that leverage Japanese expertise in sustainable urban planning and advanced manufacturing technologies.
Q50. Which of the following states is NOT covered under the geographical influence area of the Delhi-Mumbai Industrial Corridor (DMIC)?
Explanation
The Delhi-Mumbai Industrial Corridor passes through a specific alignment covering six major states: Uttar Pradesh, Haryana, Rajasthan, Madhya Pradesh, Gujarat, and Maharashtra. These states fall within the geographical influence area of the Western Dedicated Freight Corridor. Bihar is not part of the DMIC’s influence zone as it is located in the eastern part of India, along the alignment of the Eastern Corridor.Answer key for these questions
| Q | Correct answer |
|---|---|
| 41 | (c) Traditional Handloom Weaving |
| 42 | (c) III, I, II |
| 43 | (c) Investment is up to 50 crore and turnover is up to 250 crore |
| 44 | (d) Strategic and core infrastructure operations on a commercial basis. |
| 45 | (a) It must hold Navratna status and be listed on the Indian stock exchange. |
| 46 | (a) Both A and R are true and R is the correct explanation of A. |
| 47 | (b) Hindustan Aeronautics Limited (HAL) |
| 48 | (a) A-iv, B-ii, C-i, D-iii |
| 49 | (c) Japan |
| 50 | (c) Bihar |
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.