Industry, infrastructure, poverty, employment and social sector: previous-year questions
70 real UPSC Prelims questions (2011–2026) with the official answer and a clear explanation. 19 of them came in the last five papers.
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Questions per year, counted from the official papers.
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Consider the following statements :
Other things remaining unchanged, market demand for a good might increase if
- 1. price of its substitute increases
- 2. price of its complement increases
- 3. the good is an inferior good and income of the consumers increases
- 4. its price falls
Which of the above statements are correct?
Answer (a) & explanation
Statements 1 and 4 are correct (a). Statement 1 is right: if a substitute gets dearer, people switch to this good. If tea costs more, demand for coffee rises. Statement 2 is wrong: if a complement gets dearer, demand falls. If petrol costs more, people buy fewer cars. Statement 3 is wrong: for an inferior good, such as coarse grain, demand falls as income rises, because people switch to better goods. Statement 4 is right: by the law of demand, a fall in a good's own price raises the quantity demanded.
Notice the exceptions to the law of demand: Giffen goods and Veblen goods (luxury status goods). Also note the difference between a movement along the demand curve (own price) and a shift of the curve (other factors).
Answer as per the official UPSC answer key.
With reference to the Indian economy after the 1991 economic liberalization, consider the following statements :
- 1. Worker productivity (₹ per worker at 2004-05 prices) increased in urban areas while it decreased in rural areas.
- 2. The percentage share of rural areas in the workforce steadily increased.
- 3. In rural areas, the growth in non-farm economy increased.
- 4. The growth rate in rural employment decreased.
Which of the statements given above is/are correct ?
Answer (b) & explanation
Statements 3 and 4 are correct (b). The answer draws on the NITI Aayog paper on India's changing rural economy (2017). Statement 1 is wrong because worker productivity rose in both rural and urban areas after 1991, though faster in towns. Statement 2 is wrong because the rural share of the workforce fell, as people moved to cities and towns. Statement 3 is right because within villages the non-farm economy (construction, trade, transport, services) grew fast and now makes up most of rural output. Statement 4 is right because rural employment growth slowed.
Notice the term "jobless growth", used for India's high GDP growth with weak job creation. The PLFS (Periodic Labour Force Survey) is now the main source on jobs.
Answer as per the official UPSC answer key.
Consider the following statements :
As per the Industrial Employment (Standing Orders) Central (Amendment) Rules, 2018
- 1. if rules for fixed-term employment are implemented, it becomes easier for the firms/companies to lay off workers
- 2. no notice of termination of employment shall be necessary in the case of temporary workman
Which of the statements given above is/are correct?
Answer (c) & explanation
Both statements are correct (c). The 2018 amendment to the Industrial Employment (Standing Orders) Central Rules allowed fixed-term employment in all sectors, not just apparel. Statement 1 is right because a fixed-term contract simply ends on its date. The employer need not follow retrenchment procedures or give compensation, which makes it easier to let workers go. Fixed-term workers still get the same wages and benefits as permanent workers. Statement 2 is right because the rules say no notice of termination is needed for a temporary workman, whether employed for a fixed term or not.
Notice the change since then: these ideas were included in the Industrial Relations Code, 2020. The four Labour Codes were brought into force in November 2025, and fixed-term workers became eligible for gratuity after one year.
Answer as per the official UPSC answer key.
With reference to India's Five-Year Plans, which of the following statements is/are correct?
- 1. From the Second Five-Year Plan, there was a determined thrust towards substitution of basic and capital good industries.
- 2. The Fourth Five-Year Plan adopted the objective of correcting the earlier trend of increased concentration of wealth and economic power.
- 3. In the Fifth Five-Year Plan, for the first time, the financial sector was included as an integral part of the Plan.
Which of the statements given above is/are correct?
Answer (a) & explanation
Statements 1 and 2 are correct (a). Statement 1 is right because the Second Plan (1956–61), based on the Mahalanobis model, pushed heavy industries and capital goods to replace imports. Steel plants at Bhilai, Durgapur and Rourkela came then. Statement 2 is right because the Fourth Plan (1969–74) aimed at "growth with stability" and progress towards self-reliance, and sought to reduce the concentration of wealth and economic power. Bank nationalisation (1969) and the MRTP Act (1969) fit this aim. Statement 3 is wrong because the financial sector became an integral part of the Plan only in the Eighth Plan (1992–97), after the 1991 reforms.
The Twelfth Plan (2012–17) was the last. Notice that NITI Aayog replaced the Planning Commission in 2015.
Answer as per the official UPSC answer key.
Consider the following statements :
- 1. Petroleum and Natural Gas Regulatory Board (PNGRB) is the first regulatory body set up by the Government of India.
- 2. One of the tasks of PNGRB is to ensure competitive markets for gas.
- 3. Appeals against the decisions of PNGRB go before the Appellate Tribunals for Electricity.
Which of the statements given above are correct?
Answer (b) & explanation
Statements 2 and 3 are correct (b). Statement 1 is wrong because the PNGRB, set up in 2006 under the PNGRB Act, came long after other regulators such as SEBI (statutory from 1992), TRAI (1997) and CERC (1998). Statement 2 is right because its tasks include protecting consumers, promoting competitive markets for gas, and authorising city gas distribution networks and pipelines. Statement 3 is right because, under the Act, appeals against PNGRB orders go to the Appellate Tribunal for Electricity (APTEL).
Notice the push for gas: India aims to raise natural gas to 15% of its energy mix by 2030, up from about 6%. PNGRB's "One Nation, One Grid, One Tariff" reform (2023) unified pipeline tariffs.
Answer as per the official UPSC answer key.
Which one of the following is not a sub-index of the World Bank's 'Ease of Doing Business Index'?
Answer (a) & explanation
Maintenance of law and order was not a sub-index (a). The World Bank's Doing Business report ranked countries on ten areas: starting a business, dealing with construction permits (d), getting electricity, registering property (c), getting credit, protecting minority investors, paying taxes (b), trading across borders, enforcing contracts and resolving insolvency. Law and order was never one of them, though "enforcing contracts" looked at courts.
India jumped from 142nd (2014) to 63rd (2020). Notice what happened next: the World Bank stopped the report in 2021 after data irregularities involving China and Saudi Arabia. It was replaced by Business Ready (B-READY), first published in October 2024. India also runs its own Business Reforms Action Plan (BRAP) ranking for states.
Answer as per the official UPSC answer key.
In the context of any country, which one of the following would be considered as part of its social capital?
Answer (d) & explanation
Mutual trust and harmony are social capital (d). Social capital is the network of trust, shared norms, cooperation and relationships that helps people work together. Examples are community groups, self-help groups and civic bodies, made famous by Robert Putnam's Bowling Alone. Option (a) is wrong because literacy is part of human capital: the skills, education and health of people. Option (b) is wrong because buildings, infrastructure and machines are physical capital. Option (c) is wrong because the size of the working-age population is a demographic fact, the basis of the demographic dividend.
Notice India's examples of social capital: the women's SHG movement under DAY-NRLM (over 9 crore members), Kerala's Kudumbashree, and the cooperative model of Amul.
option (a) is about people too. Skills sit in individuals (human capital); trust sits between them (social capital).
Answer as per the official UPSC answer key.
Consider the following statements :
- 1. Purchasing Power Parity (PPP) exchange rates are calculated by comparing the prices of the same basket of goods and services in different countries.
- 2. In terms of PPP dollars, India is the sixth largest economy in the world.
Which of the statements given above is/are correct?
Answer (a) & explanation
Only statement 1 is correct (a). Purchasing Power Parity (PPP) exchange rates compare what the same basket of goods and services costs in different countries. This removes differences in price levels, so a rupee buys more in India than its market value in dollars suggests. Statement 2 is wrong because, by PPP, India is the world's third-largest economy, after China and the USA. Sixth was India's rank at market exchange rates around 2018.
PPP figures come from the World Bank's International Comparison Program, whose 2021 round was released in 2024. Notice India's rise at market rates: it became the fourth-largest economy in 2025, passing Japan, and aims to pass Germany soon. Per person, though, India still ranks low, around 125th by PPP.
the "sixth" was a real rank, but at market exchange rates. PPP lifts India much higher.
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Answer as per the official UPSC answer key.
In a given year in India, official poverty lines are higher in some States than in others because
Answer (b) & explanation
Price levels vary from State to State (b). A poverty line is the money a person needs to buy a fixed basket of food and non-food items. The basket is the same everywhere, but prices differ between States and between rural and urban areas. So the line is higher where prices are higher. Under the Tendulkar method (2011–12), for example, the rural line was higher in Goa than in Odisha. Options (a), (c) and (d) are wrong because the poverty rate, State GDP and PDS quality are results or other factors, not what sets the line.
Notice the newer picture: the Rangarajan Committee (2014) suggested higher lines. The World Bank's $3 a day line (2025) and NITI Aayog's Multidimensional Poverty Index are used today.
Answer as per the official UPSC answer key.
Consider the following statements :
- 1. Coal sector was nationalized by the Government of India under Indira Gandhi.
- 2. Now, coal blocks are allocated on lottery basis.
- 3. Till recently, India imported coal to meet the shortages of domestic supply, but now India is self-sufficient in coal production.
Which of the statements given above is/are correct?
Answer (a) & explanation
Only statement 1 is correct (a). Statement 1 is right because coal mines were nationalised in 1971–73 under Indira Gandhi, coking coal first and then non-coking coal. Coal India Limited was formed in 1975. Statement 2 is wrong because, after the Supreme Court cancelled 214 coal block allocations in 2014 (the "Coalgate" case), blocks are now given by transparent e-auction, not lottery. Statement 3 is wrong because India still imports coal, mainly coking coal for steel and high-grade coal for coastal power plants.
Notice the newer facts: commercial coal mining by private firms opened in 2020, and India's coal output crossed 1 billion tonnes in FY2024–25. India is still the world's second-largest coal producer and consumer, after China.
Answer as per the official UPSC answer key.
Increase in absolute and per capita real GNP do not connote a higher level of economic development, if
Answer (c) & explanation
GNP growth is not development if poverty and unemployment rise (c). Growth is a rise in output. Development means a better life for most people: less poverty, more jobs, and better health and education. If GNP and even per capita GNP rise while poverty and unemployment increase, the gains have gone to a few, and the economy has grown without developing. Options (a) and (b) describe changes in the structure of output, and (d) describes trade, not people's welfare.
This is why UNDP's Human Development Index (1990, Mahbub ul Haq and Amartya Sen) looks at health, education and income. Notice the related ideas: "jobless growth", inequality measured by the Gini coefficient, and the Multidimensional Poverty Index used by NITI Aayog.
Answer as per the official UPSC answer key.
Consider the following statements :
- 1. In India, State Governments do not have the power to auction non-coal mines.
- 2. Andhra Pradesh and Jharkhand do not have gold mines.
- 3. Rajasthan has iron ore mines.
Which of the statements given above is/are correct ?
Answer (d) & explanation
Only statement 3 is correct (d). Statement 1 is wrong because, under the MMDR Act, State Governments own and auction most non-coal mineral blocks. The 2015 amendment made auctions compulsory. The 2023 amendment let the Centre auction critical minerals, such as lithium and REEs. Statement 2 is wrong because Jharkhand has gold at Parasi and Lawa, and Andhra Pradesh has gold at Chigargunta and Ramagiri. Statement 3 is right because Rajasthan has iron ore in Jaipur, Jhunjhunu (Dabla–Singhana) and Udaipur.
Karnataka's Hutti is India's main working gold mine. Notice the newer resources: lithium found in Reasi, J&K (2023), and the National Critical Mineral Mission (2025), which looks for these minerals at home and abroad.
Answer as per the official UPSC answer key.
International Labour Organization's Conventions 138 and 182 are related to
Answer (a) & explanation
ILO Conventions 138 and 182 deal with child labour (a). Convention 138 (1973) sets the minimum age for work, which is usually not below the age of finishing compulsory schooling. Convention 182 (1999) bans the worst forms of child labour, such as slavery, trafficking, child soldiers and hazardous work. India ratified both in June 2017, after amending its Child Labour Act in 2016 to ban all work below 14 and hazardous work for those aged 14–18. They do not deal with climate adaptation (b), food prices (c), or gender parity (d), which is covered by Conventions 100 and 111.
Convention 182 became the first ILO convention ratified by every member (2020). Notice the eight core conventions; India has ratified six of them, but not 87 and 98 on freedom of association.
Answer as per the official UPSC answer key.
Consider the following statements :
Human capital formation as a concept is better explained in terms of a process which enables
- 1. individuals of a country to accumulate more capital.
- 2. increasing the knowledge, skill levels and capacities of the people of the country.
- 3. accumulation of tangible wealth.
- 4. accumulation of intangible wealth.
Which of the statements given above is/are correct ?
Answer (c) & explanation
Statements 2 and 4 are correct (c). Human capital formation is the process of adding to people's knowledge, skills, health and abilities through education, training, health care and migration (2). These skills cannot be seen or touched and cannot be sold separately from the person, so they count as intangible wealth (4). Building up ordinary capital (1) or tangible wealth (3), such as machines and buildings, is physical capital formation.
The NCERT Economics textbook uses this exact framing. Notice how India invests in human capital: NEP 2020, Skill India, and Ayushman Bharat. Economists such as T. W. Schultz and Gary Becker showed that spending on people brings returns just like spending on machines.
Answer as per the official UPSC answer key.
Despite being a high saving economy, capital formation may not result in significant increase in output due to
Answer (d) & explanation
A high capital-output ratio is the reason (d). The capital-output ratio, or ICOR (incremental capital-output ratio), is how much investment is needed to raise output by one unit. If it is high, a lot of saving and investment produces only a little extra output. This happens when capital is used inefficiently, when projects take years to finish, or when money is locked in idle capacity. Weak administration (a), illiteracy (b), and population density (c) may matter, but this is the direct economic reason.
The Harrod–Domar model says growth = savings rate ÷ ICOR, and it shaped India's early Five-Year Plans. Notice India's ICOR of about 4 today. The Economic Survey often warns that it needs to come down.
Answer as per the official UPSC answer key.
With reference to Pradhan Mantri Kaushal Vikas Yojana, consider the following statements :
- 1. It is the flagship scheme of the Ministry of Labour and Employment.
- 2. It, among other things, will also impart training in soft skills, entrepreneurship, financial and digital literacy.
- 3. It aims to align the competencies of the unregulated workforce of the country to the National Skill Qualification Framework.
Which of the statements given above is/are correct ?
Answer (c) & explanation
Statements 2 and 3 are correct (c). Statement 1 is wrong because PMKVY, launched in 2015, is the flagship scheme of the Ministry of Skill Development and Entrepreneurship (MSDE), not the Labour Ministry. It is run through the National Skill Development Corporation (NSDC). Statement 2 is right because, besides trade skills, it trains people in soft skills, entrepreneurship, and financial and digital literacy. Statement 3 is right because its Recognition of Prior Learning (RPL) part tests and certifies informal workers against the National Skills Qualifications Framework (NSQF).
The scheme is now in PMKVY 4.0, with a focus on new-age skills such as AI, drones and coding. Notice the related Skill India Digital Hub and the PM Vishwakarma scheme (2023) for traditional artisans.
"Labour and Employment" sounds right for a jobs scheme. Skilling has had its own ministry since 2014.
Answer as per the official UPSC answer key.
With reference to 'Quality Council of India (QCI)', consider the following statements :
- 1. QCI was set up jointly by the Government of India and the Indian Industry.
- 2. Chairman of QCI is appointed by the Prime Minister on the recommendations of the industry to the Government.
Which of the above statements is/are correct ?
Answer (c) & explanation
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.
Answer as per the official UPSC answer key.
With reference to 'National Skills Qualification Framework (NSQF)', which of the statements given below is/are correct ?
- 1. Under NSQF, a learner can acquire the certification for competency only through formal learning.
- 2. An outcome expected from the implementation of NSQF is the mobility between vocational and general education.
Select the correct answer using the code given below :
Answer (b) & explanation
Only statement 2 is correct (b). The National Skills Qualification Framework (NSQF), notified in 2013, arranges qualifications in ten levels based on what a learner can actually do. Statement 1 is wrong because certification is possible through formal, non-formal or informal learning, including Recognition of Prior Learning. Statement 2 is right because a key aim is to let learners move between vocational and general education, and between study and jobs, without losing credit.
The National Credit Framework (2023) and NEP 2020 build on this by joining vocational and academic credits. Notice the bodies involved: NCVET (2018) regulates vocational training, and Sector Skill Councils under NSDC set the job standards.
"only" in statement 1. Recognising skills learnt outside school is a core purpose of NSQF.
Answer as per the official UPSC answer key.
Consider the following in respect of 'National Career Service' :
- 1. National Career Service is an initiative of the Department of Personnel and Training, Government of India.
- 2. National Career Service has been launched in a Mission Mode to improve the employment opportunities to uneducated youth of the country.
Which of the above statements is/are correct ?
Answer (d) & explanation
Neither statement is correct (d). The National Career Service (NCS), launched in July 2015, is run by the Ministry of Labour and Employment, through the Directorate General of Employment, not by DoPT, so statement 1 is wrong. Statement 2 is wrong because it is not limited to uneducated youth. It is an online portal and a network of Model Career Centres that link all job seekers with employers. It also offers career counselling, skill information and job fairs, and it modernised the old employment exchanges.
Notice the related platforms: e-Shram for unorganised workers, Skill India Digital Hub, and the Employment Linked Incentive scheme from the 2024 Budget, which encourages formal hiring.
Answer as per the official UPSC answer key.
Which of the following has/have occurred in India after its liberalization of economic policies in 1991 ?
- 1. Share of agriculture in GDP increased enormously.
- 2. Share of India's exports in world trade increased.
- 3. FDI inflows increased.
- 4. India's foreign exchange reserves increased enormously.
Select the correct answer using the codes given below :
Answer (b) & explanation
Statements 2, 3 and 4 are correct (b). After the 1991 reforms (the LPG model), FDI rose from almost nothing to tens of billions of dollars a year (3). Forex reserves climbed from about $1 billion in mid-1991, when India pledged gold, to over $300 billion by 2008 (4). They are now about $700 billion. India's share of world exports rose from about 0.5% to around 2% (2). Statement 1 is wrong because agriculture's share of GDP fell, from about 30% to under 20%, as services grew. Agriculture still employs about 45% of workers.
Notice this pattern: India's growth skipped a manufacturing phase and went from agriculture straight to services. That is why schemes like Make in India and PLI aim to raise manufacturing's share.
Answer as per the official UPSC answer key.