Industry: MSMEs, Make in India and PLI

Dholera Special Investment Region lies in Ahmedabad district of Gujarat, on the Gulf of Khambhat. It is one of the first greenfield smart industrial cities of the DMIC programme, developed by a special purpose vehicle of NICDC and the Gujarat Government. In February 2024 the Union Cabinet approved the semiconductor fab proposed there by Tata Electronics in partnership with Taiwan's PSMC under the India Semiconductor Mission. Shendra-Bidkin (AURIC) in Maharashtra is the other early DMIC city.

Both statements are correct. Make in India was launched on 25 September 2014 with the aim of facilitating investment, fostering innovation, building best-in-class manufacturing infrastructure and making India a hub for manufacturing and design. It works through sector action plans, ease-of-doing-business reforms, investment facilitation (Invest India) and later through schemes such as PLI. It is coordinated by DPIIT in the Ministry of Commerce and Industry. It is a programme of policy and facilitation, not a single subsidy scheme.

Statements 1 and 2 are correct. Under PLI, eligible firms receive a percentage of their incremental sales of domestically manufactured goods over a base year, for a fixed number of years, often subject to minimum investment thresholds. The first schemes (2020) covered mobile phones and components, critical drug inputs and medical devices; on 11 November 2020 the Cabinet approved ten more, taking the commitment for 13 sectors to about ₹1.97 lakh crore over five years; drones became the 14th sector in September 2021. Statement 3 is wrong: payment is made only after the firm achieves and reports the eligible production and sales.

Three of them are PLI sectors. The 14 sectors (13 approved in 2020 and drones added in September 2021) are mobile manufacturing and specified electronic components; critical key starting materials, drug intermediates and active pharmaceutical ingredients; medical devices; automobiles and auto components; pharmaceutical drugs; specialty steel; telecom and networking products; electronic and IT hardware; white goods (air conditioners and LED lights); food products; textile products (man-made fibre and technical textiles); high- efficiency solar PV modules; advanced chemistry cell batteries; and drones and drone components. Toys are not in this list; the toy sector has been supported through quality control orders, higher customs duty and a national action plan instead.

A capital subsidy reimburses part of the cost of plant and machinery once the investment is made, so the Government pays even if the unit later produces little. A production- linked incentive pays a percentage of incremental sales or output, so the payout rises only if the firm actually scales up production in India. This performance-based design shifts risk to the firm and links fiscal cost to results. PLI schemes are open to large firms and MSMEs subject to thresholds, are cash incentives (not tax holidays) and do not by themselves raise tariffs.

The ZED ('Zero Defect, Zero Effect') certification scheme, launched on 28 April 2022, encourages MSMEs to adopt quality and environment-friendly practices. Firms move through Bronze, Silver and Gold levels, and the Government subsidises the cost of certification (80 per cent for micro, 60 per cent for small and 50 per cent for medium units). The Quality Council of India implements it. Certification is voluntary, not a condition of Udyam registration. Statements 1 and 2 are correct.

Statements 1 and 2 are correct. The Cabinet approved the 'National Programme on Advanced Chemistry Cell Battery Storage' in May 2021 with an outlay of ₹18,100 crore to set up 50 GWh of ACC manufacturing capacity, with incentives linked to the value added in India and sales. Batteries are central to electric vehicles and grid storage. Statement 3 is wrong: the scheme is administered by the Ministry of Heavy Industries, which also handles schemes for electric mobility and the automobile sector.

All three statements are correct. NICDC (renamed from the National Industrial Corridor Development and Implementation Trust) works under DPIIT as the apex agency for industrial corridors and greenfield industrial cities such as Dholera (Gujarat) and Shendra- Bidkin (Maharashtra). On 28 August 2024 the CCEA approved 12 new industrial smart cities in 10 States, including Khurpia, Rajpura-Patiala, Dighi, Palakkad, Agra, Prayagraj, Gaya, Zaheerabad, Orvakal, Kopparthy and Jodhpur-Pali, at about ₹28,602 crore. The Delhi-Mumbai Industrial Corridor, the first of the corridors, was conceived with Japan's support.

The Labour Bureau compiles this data (c). The Labour Bureau, under the Ministry of Labour and Employment, with offices at Shimla and Chandigarh, collects statistics on industrial disputes, closures, retrenchments and lay-offs. It also compiles the Consumer Price Index for Industrial Workers (CPI-IW), used to set dearness allowance. Option (a) is wrong: the Central Statistics Office, now part of the NSO, handles national accounts and GDP. Option (b) is wrong: DPIIT compiles the Wholesale Price Index and the index of eight core industries. Option (d) is wrong: NTMIS tracked technical manpower supply.

Notice that the Labour Bureau now also runs the Quarterly Employment Survey. The Periodic Labour Force Survey (PLFS), by contrast, comes from the NSO.

Answer as per the official UPSC answer key.

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Statements 2 and 3 are correct (b). Statement 1 is wrong: the EPF scheme covers only establishments with 20 or more workers, and members earning within the wage ceiling (₹15,000 a month), so not every casual worker is covered. Statement 2 is right: labour laws on working hours and overtime apply to all workers, including casual ones. Statement 3 is right: the Code on Wages, 2019 lets the government notify that an establishment or industry must pay wages only by cheque or into the worker's bank account.

Notice the four labour codes: Wages (2019), Industrial Relations, Social Security, and Occupational Safety, Health and Working Conditions (2020). They merged 29 central labour laws and came into force in November 2025. The e-Shram portal registers unorganised workers.

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Only statement 2 describes the lender of last resort (b). As lender of last resort, the RBI gives emergency funds to a basically sound bank that faces a sudden shortage of cash, so that panic does not spread to other banks and the system stays stable. The Marginal Standing Facility is one such window. Statement 1 is wrong: the RBI does not lend directly to trade or industry bodies. Statement 3 is wrong: lending to governments through ways and means advances is its role as banker to the government, not as lender of last resort.

Notice the idea came from Walter Bagehot's Lombard Street (1873): lend freely to solvent banks, against good collateral, at a penalty rate.

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Both statements are correct (c). The Quality Council of India, set up in 1997, is an autonomous body formed jointly by the Government of India and industry bodies ASSOCHAM, CII and FICCI (1). It works as India's national accreditation system, through bodies such as NABL (laboratories), NABH (hospitals) and NABCB. Its chairman is appointed by the Prime Minister on the industry's recommendation (2). DPIIT (formerly DIPP) is its nodal department.

QCI also runs ZED certification for MSMEs and checks cleanliness rankings under Swachh Survekshan. Notice how it differs from BIS: QCI accredits the bodies that check quality, while BIS sets standards and issues product marks.

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Indian coal has a high ash content, so steel plants import most of their coking (metallurgical) coal, mainly from Australia, and also from the USA, Russia and others (c). Saltpetre (a) is used for explosives and fertilisers, and rock phosphate (b) for phosphatic fertilisers; neither is needed for steel, so (d) also fails.

India is the world's second-largest steel producer and aims for 300 million tonnes of capacity by 2030 under the National Steel Policy 2017. Notice how this import dependence links steel, trade and energy security, which is why coal washeries and Mission Coking Coal matter.

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Purchase and sale of government securities by the RBI is correct (c). Open Market Operations are the RBI's buying and selling of government securities in the market to manage liquidity. Buying securities pays out money and adds liquidity; selling them absorbs money. (a) is wrong: banks borrowing from the RBI happens through the repo window or Marginal Standing Facility. (b) is wrong: bank lending to industry is ordinary credit, not OMO. (d) fails because (c) is correct.

Notice the variants: 'Operation Twist' (2019–20) bought long-term and sold short-term bonds at the same time, and G-SAP (2021) was a pre-announced bond-buying programme. OMOs are part of quantitative monetary tools, with CRR and SLR. Trap: (a) is a liquidity tool too, but not OMO.

Answer as per the official UPSC answer key.

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