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 81–90 of 91 questions
RAS PrelimsIndian Economy · Industrial Growth, Policy Reforms and LPG
Q81. Match List I with List II and select the correct answer.
Pre-reform Committee
Subject of Enquiry
A. Mahalanobis Committee
i. Industrial Licensing Policy Inquiry
B. Dutt Committee
ii. Distribution of Income and Levels of Living
C. Abid Hussain Committee
iii. Small Scale Industries
D. Hazari Committee
iv. Working of Industrial Licensing System
Explanation
Several committees were appointed in the pre-reform era to study different aspects of the Indian economy. The Mahalanobis Committee focused on the distribution of income and levels of living. The Dutt Committee conducted an industrial licensing policy inquiry. The Abid Hussain Committee examined small-scale industries. Additionally, the Hazari Committee investigated the practical working of the industrial licensing system and its impact.
RAS PrelimsIndian Economy · Industrial Growth, Policy Reforms and LPG
Q82. Following the 1991 reforms, which sector of the Indian economy showed the most rapid growth and became the largest contributor to the GDP?
Explanation
Following the structural reforms initiated in 1991, the services sector emerged as the fastest-growing part of the Indian economy. It rapidly expanded to become the largest contributor to the country’s Gross Domestic Product, surpassing both agriculture and manufacturing. This growth was driven by several sub-sectors, including Information Technology, telecommunications, and financial services. The success allowed India to establish a strong presence.
RAS PrelimsIndian Economy · Industrial Growth, Policy Reforms and LPG
Q83. Read the following statements regarding the trend of FDI inflows in India post-2000: I. There has been a steady, long-term increase in cumulative FDI inflows. II. The services sector (including financial, banking, and insurance) has been a top recipient. III. Equity inflows constitute the largest component of total FDI. IV. 100% of the FDI inflow is exclusively directed to the agricultural sector. V. Repatriation of profits by foreign investors is heavily restricted, deterring FDI. Which of the statements given above are incorrect?
Explanation
Since 2000, India has seen a steady increase in cumulative FDI inflows, with equity being a major component and the services sector as a top recipient. However, it is incorrect to state that 100% of FDI is directed to agriculture, as the sector receives a very small share. Additionally, India generally allows the repatriation of profits by foreign investors, attracting sustained investment.
RAS PrelimsIndian Economy · Industrial Growth, Policy Reforms and LPG
Q84. What is the threshold turnover limit for a company to be classified as a ‘Startup’ under the current DPIIT guidelines in India?
Explanation
Under the current guidelines issued by the Department for Promotion of Industry and Internal Trade, a company can be classified as a Startup only if its annual turnover does not exceed one hundred crore rupees for any financial year since its incorporation. This turnover threshold, combined with the ten-year age limit, defines eligibility for various benefits, including tax holidays and innovation support.
RAS PrelimsIndian Economy · Industrial Growth, Policy Reforms and LPG
Q85. Read the following statements regarding the MRTP Act, 1969: I. It aimed to restrict monopolistic trade practices. II. It was replaced by the Competition Act, 2002. Which of the statements given above is/are correct?
Explanation
The Monopolies and Restrictive Trade Practices Act of 1969 was the primary legislation intended to prevent the concentration of economic power and curb anti-competitive trade practices. As the Indian economy moved toward liberalisation, this act was deemed outdated. Consequently, it was replaced by the Competition Act of 2002. The new law shifted the focus from restricting monopolies to promoting healthy competition.
RAS PrelimsIndian Economy · Industrial Growth, Policy Reforms and LPG
Q86. Under the new composite criteria for MSMEs, if an enterprise has an investment of 8 crore in plant and machinery and an annual turnover of 40 crore, it will be classified as a:
Explanation
According to the 2020 revised MSME classification, an enterprise is categorized as a Small enterprise if its investment in plant and machinery does not exceed ten crore rupees and its annual turnover does not exceed fifty crore rupees. Therefore, an enterprise with eight crore investment and forty crore turnover falls within these specific limits. This ensure businesses are classified based on performance.
RAS PrelimsIndian Economy · Industrial Growth, Policy Reforms and LPG
Q87. Which of the following was NOT an explicit objective of the New Economic Policy of 1991?
Explanation
The New Economic Policy of 1991 was designed to stabilize the economy and implement structural reforms to improve efficiency. Its explicit objectives included reducing the fiscal deficit, increasing foreign exchange reserves, and improving public sector efficiency. The policy aimed to open the Indian economy to global markets through liberalisation. Therefore, plunging the economy into a closed autarky was the exact opposite.
RAS PrelimsIndian Economy · Industrial Growth, Policy Reforms and LPG
Q88. Consider the following events regarding India’s progression in Ease of Doing Business and arrange them in correct chronological order: I. India ranks in the top 100 for the first time. II. Introduction of the Business Reform Action Plan (BRAP) for states. III. World Bank discontinues the Doing Business report. Select the correct order:
Explanation
The progression of India’s engagement with the Ease of Doing Business framework began with domestic initiatives like the Business Reform Action Plan. Following systematic reforms, India significantly improved its international standing, ranking in the top 100 of the World Bank index for the first time in 2017. Finally, the World Bank discontinued the Doing Business report globally in 2021 following data irregularities.
RAS PrelimsIndian Economy · Industrial Growth, Policy Reforms and LPG
Q89. The concept of "plug and play" infrastructure, frequently mentioned in recent industrial policies and industrial corridors, refers to:
Explanation
In recent industrial policy discussions, plug and play infrastructure refers to the provision of ready-to-use industrial facilities. These are pre-built factory sheds equipped with all necessary utilities like electricity, water, and high-speed internet connectivity. This model allows entrepreneurs to start their manufacturing operations immediately without spending time on land acquisition. It is a key strategy used in industrial corridors.
RAS PrelimsIndian Economy · Industrial Growth, Policy Reforms and LPG
Q90. Match List I with List II and select the correct answer.
Industrial Term/Policy
Associated Sector/Scope
A. White Goods
i. Logistics and Multimodal Connectivity
B. PM Gati Shakti
ii. PLI scheme target sector (ACs and LEDs)
C. Make in India
iii. Innovation and early-stage enterprise support
D. Startup India
iv. 27 broadly identified sectors for manufacturing push
Explanation
Various government schemes target specific industrial goals. The Production Linked Incentive scheme for White Goods focuses on air conditioners and LED lights. PM Gati Shakti is a master plan dedicated to improving logistics and multimodal connectivity. The Make in India initiative identifies twenty-seven broad sectors for a manufacturing push. Meanwhile, the Startup India program is designed to support innovation.
Answer key for these questions
Q
Correct answer
81
(a) A-ii, B-i, C-iii, D-iv
82
(d) Services
83
(b) IV and V only
84
(c) 100 crore
85
(c) Both I and II
86
(b) Small Enterprise
87
(b) To plunge the Indian economy into a closed autarky
88
(b) II, I, III
89
(c) Pre-built factory sheds with utilities ready for manufacturing.
90
(a) A-ii, B-i, C-iv, 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.
