Industrial Sector Archives

31. The objective of the ‘Golden Handshake’ scheme was to :

The objective of the ‘Golden Handshake’ scheme was to :

stabilize the prices of gold in the market.

improve the labour-management relations in industrial organizations.

close the sick industrial units.

reduce the burden of overstaffing in public enterprises.

This question was previously asked in

UPSC CAPF – 2010

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The objective of the ‘Golden Handshake’ scheme is primarily to reduce the burden of overstaffing in public enterprises.

The term “Golden Handshake” is commonly used to refer to a Voluntary Retirement Scheme (VRS). Such schemes are offered by companies, particularly public sector enterprises (PSUs) in India, to employees as an incentive to voluntarily retire before their normal retirement age. The main purpose is to reduce the number of employees and thus the overall wage bill, often to address issues of overstaffing, improve efficiency, or restructure the organization. While it might sometimes be used in the context of closing sick units, its core objective is workforce reduction, especially where overstaffing is a problem.

The compensation offered under a VRS is typically more attractive than regular retirement benefits, aiming to make the voluntary separation appealing to a sufficient number of employees.

32. Consider the following statements: According to IFC/World Bank Doing

Consider the following statements:

According to IFC/World Bank Doing Business Report, 2009 India is the most difficult country to enforce contracts in a court of otherwise.
According to the UNIDO Report, 2009 in the Competitive Industrial Performance Index India is ahead of China.

Which of the statements given above is/are correct ?

1 only

2 only

Both 1 and 2

Neither 1 nor 2

This question was previously asked in

UPSC CAPF – 2009

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The correct answer is D) Neither 1 nor 2.

Statement 1: According to the IFC/World Bank Doing Business Report 2009 (published in September 2008), India was ranked 180th out of 181 economies on the ease of enforcing contracts. While this indicates extreme difficulty and was among the most difficult, it was not *the* most difficult; Eritrea was ranked 181st. Thus, the statement “most difficult country” is technically incorrect.
Statement 2: According to the UNIDO Competitive Industrial Performance (CIP) Index report 2009 (using data up to 2007), China ranked significantly higher than India in terms of competitive industrial performance. China was among the top performers, while India was much lower down the list. Therefore, the statement that India is ahead of China is incorrect.

The Doing Business report is an annual publication assessing the ease of doing business in various economies. The UNIDO CIP Index measures the ability of countries to produce and export manufactured goods competitively. Both reports in 2009 did not support the claims made in the statements regarding India’s ranking relative to other countries, particularly China.

33. Consider the following statements with respect to recent developments

Consider the following statements with respect to recent developments in infrastructure sector in India:
1. India Infrastructure Finance Company Limited was set up as a banking company for providing long-term loans for financing infrastructure projects.
2. 100 per cent Foreign Direct Investment under automatic route is permitted for all infrastructure projects.
Which of the statements given above is/are correct?

1 only

2 only

Both 1 and 2

Neither 1 nor 2

This question was previously asked in

UPSC CAPF – 2009

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Statement 1 is incorrect. India Infrastructure Finance Company Limited (IIFCL) was established in 2006 as a wholly-owned government company (under the Ministry of Finance). It is registered with the RBI as a Non-Banking Financial Company-Infrastructure Finance Company (NBFC-IFC), not a banking company. Its purpose is to provide long-term financial assistance to viable infrastructure projects.
Statement 2 is incorrect. While India allows 100% Foreign Direct Investment (FDI) under the automatic route in many infrastructure sectors (like roads, ports, airports, power generation, telecom services), the automatic route is not permitted for *all* infrastructure projects universally without any conditions or exclusions (e.g., certain railway activities, atomic energy-related infrastructure might have restrictions or require government approval). The term “all” makes the statement false.
Since both statements are incorrect, the correct option is Neither 1 nor 2.

Understanding the nature of financial institutions like IIFCL (NBFC vs Banking Co.) and the nuances of FDI policy (automatic vs. government route, sector-specific conditions) is crucial when analyzing infrastructure development in India.

IIFCL provides financial support through various products like long-term debt, subordinate debt, guarantees, and credit enhancement. India’s FDI policy is dynamic and sector-specific, aiming to attract foreign capital while safeguarding national interests.

34. As per the policy applicable in 2017, how much Foreign Direct Investme

As per the policy applicable in 2017, how much Foreign Direct Investment (FDI) is permitted in the defence sector in India ?

49 per cent through the automatic route

26 per cent through the government route

26 per cent through the automatic route and beyond that up to 49 per cent through the government route

75 per cent through the automatic route

This question was previously asked in

UPSC NDA-1 – 2018

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As per the policy applicable in 2017, the correct option is A, 49 per cent through the automatic route.

– In 2016, the Indian government liberalized the FDI policy in the defence sector, permitting FDI up to 49% under the automatic route.
– Beyond 49%, FDI was permitted through the government route (Foreign Investment Promotion Board/FIPB, which was later abolished and replaced by the DPIIT consultation mechanism) on a case-by-case basis, with the condition that it should result in access to modern technology.

The FDI limit in defence production was further increased in May 2020 to 74% under the automatic route, and up to 100% through the government route where it is likely to result in access to modern technology. However, the question specifically asks about the policy applicable in 2017.

35. Which of the following are essential pre-requisites for establishment

Which of the following are essential pre-requisites for establishment of a thermal power station ?

1. Availability of fossil fuels
2. Proximity to a river, lake or sea
3. Good transport network
4. Proximity to an urban centre

Select the correct answer using the code given below :

1, 2 and 3

2 and 4

2 and 3 only

1 and 3 only

This question was previously asked in

UPSC NDA-1 – 2018

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The correct answer is A.

Thermal power stations burn fossil fuels (coal, oil, or natural gas) to generate electricity. Therefore, the availability of fossil fuels (1) is essential. These plants require large amounts of water for cooling purposes, so proximity to a river, lake, or sea (2) is also essential. A good transport network (3) is crucial for bringing in fuel (especially coal) and transporting equipment and personnel. Proximity to an urban centre (4) is not essential and often avoided due to space requirements, pollution concerns, and safety. Power is transmitted to urban centres via transmission lines. Thus, conditions 1, 2, and 3 are essential pre-requisites.

Other factors influencing the location of thermal power plants include the availability of land and proximity to load centres to minimize transmission losses, although the latter is often less critical than fuel and water availability.

36. Which of the following is/are the component/components of the Integrat

Which of the following is/are the component/components of the Integrated Power Development Scheme launched by the Government of India recently?
1. Strengthening of sub-transmission and distribution networks in the urban areas.
2. Metering of distribution transformers/feeders/consumers in the rural areas.

1 only

2 only

Both 1 and 2

Neither 1 nor 2

This question was previously asked in

UPSC NDA-1 – 2016

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The Integrated Power Development Scheme (IPDS) was launched by the Government of India in December 2014. Its primary objectives are focused on strengthening urban power distribution infrastructure.
Statement 1: “Strengthening of sub-transmission and distribution networks in the urban areas.” This is a stated component of the IPDS.
Statement 2: “Metering of distribution transformers/feeders/consumers in the rural areas.” Metering in rural areas is primarily covered under the Deen Dayal Upadhyaya Gram Jyoti Yojana (DDUGJY), not IPDS. IPDS components related to metering also focus on urban areas (metering of distribution transformers/feeders/consumers in urban areas).
Therefore, only statement 1 is a component of IPDS.

– IPDS focuses on strengthening power distribution infrastructure in urban areas.
– DDUGJY focuses on rural power distribution infrastructure.
– Metering is a component of both schemes, but specific to their respective areas (urban for IPDS, rural for DDUGJY).

The main components of IPDS include: (i) Strengthening of sub-transmission and distribution networks in urban areas; (ii) Metering of distribution transformers, feeders, and consumers in urban areas; and (iii) IT enablement of distribution sector and strengthening of distribution network in urban areas. The scheme aims to reduce Aggregate Technical & Commercial (AT&C) losses.

37. Areas which are engines for economic growth supported by quality infra

Areas which are engines for economic growth supported by quality infrastructure and complemented by an attractive fiscal package are known as

Export Processing Zones

Duty Free Tariff Zones

Special Economic Zones

Technology Parks

This question was previously asked in

UPSC NDA-1 – 2016

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The correct answer is Special Economic Zones (SEZs).

Special Economic Zones (SEZs) are specifically designated areas in a country with special economic regulations that differ from the rest of the country. They are designed to promote trade, investment, job creation, and effective administration. SEZs are typically supported by quality infrastructure and often include attractive fiscal packages, such as tax incentives, customs duty exemptions, and streamlined procedures, to attract domestic and foreign businesses.

Export Processing Zones (EPZs) are an earlier form of SEZs, primarily focused on promoting exports through tariff exemptions and simplified customs procedures. Duty Free Tariff Zones (DFTFs) are areas where goods can be imported and exported without customs duties, often used for trading and re-processing. Technology Parks are areas focused on promoting technology and IT-related industries, often with specialized infrastructure but not necessarily the broad fiscal and regulatory benefits of a full SEZ. SEZs encompass a broader mandate for economic growth across various sectors, supported by comprehensive policies and infrastructure.

38. The Headquarters of Coal India Limited (CIL), a ‘Maha Ratna’ PSU under

The Headquarters of Coal India Limited (CIL), a ‘Maha Ratna’ PSU under the Ministry of Coal, is located at:

Dhanbad

Nagpur

Kolkata

Kothagudem

This question was previously asked in

UPSC Geoscientist – 2021

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The correct answer is Kolkata.

Coal India Limited (CIL), the largest coal producer in the world and a major Public Sector Undertaking (PSU) of the Government of India, has its headquarters located in Kolkata, West Bengal.

CIL is a ‘Maha Ratna’ company and operates through various subsidiaries located in the major coal-producing states of India, such as Jharkhand, Odisha, West Bengal, Maharashtra, Chhattisgarh, Madhya Pradesh, and Assam. Dhanbad is known as the ‘Coal Capital of India’ due to its abundant coal reserves and mining activities, but it is not the location of CIL headquarters. Nagpur is home to Western Coalfields Limited (WCL), a CIL subsidiary. Kothagudem is in Telangana and is a key area for Singareni Collieries Company Limited (SCCL), which is a separate state-owned company.

39. Which one of the following countries in Asia established the first Exp

Which one of the following countries in Asia established the first Export Processing Zone (EPZ) in 1965?

China

India

South Korea

Japan

This question was previously asked in

UPSC Geoscientist – 2020

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India established the first Export Processing Zone (EPZ) in Asia in 1965.

The first EPZ was set up at Kandla (now Deendayal Port) in Gujarat, India.

EPZs were later replaced by the Special Economic Zone (SEZ) policy in India, starting in 2000, to provide a stable policy regime and encourage foreign investment.

40. Which one of the following statements for a firm’s equilibrium in Perf

Which one of the following statements for a firm’s equilibrium in Perfect Competition is not correct ?

The market price must be greater or equal to average variable cost in the short run.

The market price must be equal to marginal cost.

The market price must be equal to average cost in the long run.

The marginal cost decreases at the equilibrium output.

This question was previously asked in

UPSC CDS-2 – 2024

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The correct option is D. The question asks which statement about a firm’s equilibrium in Perfect Competition is *not* correct.

In perfect competition, a firm is a price taker, meaning the market price (P) is constant for the firm and equals its Marginal Revenue (MR) and Average Revenue (AR). A firm maximizes profit by producing at the output level where Marginal Cost (MC) equals Marginal Revenue (MR). Thus, the equilibrium condition is P = MR = MC.
Let’s evaluate the statements:
A) The market price must be greater or equal to average variable cost in the short run: Correct. A firm continues to produce in the short run only if the price is at least equal to the average variable cost (P ≥ AVC). If P < AVC, the firm minimizes losses by shutting down. B) The market price must be equal to marginal cost: Correct. P = MC is the profit-maximizing (or loss-minimizing) condition for a firm in perfect competition. C) The market price must be equal to average cost in the long run: Correct. In the long run equilibrium of a perfectly competitive market, entry and exit of firms ensure that price equals the minimum average total cost (P = MC = ATC), resulting in zero economic profit for all firms. D) The marginal cost decreases at the equilibrium output: Incorrect. For the equilibrium at P=MC to be stable and represent profit maximization, the MC curve must be rising at the point of intersection with the MR (Price) line. If MC were decreasing at equilibrium, producing more would increase profit (or decrease loss) because the cost of the next unit would be less than the revenue it generates (P). Firms produce on the upward-sloping portion of their MC curve above the AVC curve.

The stable equilibrium condition for a firm is MC = MR and MC must be rising (or the MC curve must intersect the MR curve from below). In perfect competition, MR is horizontal (equal to P), so the firm operates on the upward-sloping part of its MC curve where it intersects the horizontal demand curve (P).