Indian Economy Textbook Questions – Industrialisation · Industrial Policies 1948, 1956, 1991 · Public Sector and Disinvestment · MSMEs · Current Schemes · Exports, FDI and SEZs · Industrial Development of Tamil Nadu (Part 2)

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Indian Economy Textbook Questions – Industrialisation · Industrial Policies 1948, 1956, 1991 · Public Sector and Disinvestment · MSMEs · Current Schemes · Exports, FDI and SEZs · Industrial Development of Tamil Nadu (Part 2) – 20 questions, subject: Economy. Every question has the correct answer with a one-line explanation; tap "Show Answer". Free practice for TNPSC, UPSC, SSC, Bank and RRB exams – Shanmugam IAS Academy, Coimbatore.

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1.  
Match the MUDRA loan category with its upper limit:
a. Shishu1. ₹20 lakh
b. Kishore2. ₹5 lakh
c. Tarun3. ₹10 lakh
d. Tarun Plus4. ₹50,000

Correct Answer: C [4 2 3 1]

Explanation:

Shishu up to ₹50,000; Kishore up to ₹5 lakh; Tarun up to ₹10 lakh; Tarun Plus up to ₹20 lakh.

2.  
Which statements on the MSME limits from 1.4.2025 (investment / turnover) are correct?
  1. Micro: ₹2.5 crore / ₹10 crore.
  2. Small: ₹10 crore / ₹50 crore.
  3. Medium: ₹125 crore / ₹500 crore.

Correct Answer: D [1, 3 only]

Explanation:

2025 limits (₹ crore): micro 2.5/10, small 25/100, medium 125/500. "10/50" was the 2020 small-enterprise limit.

3.  
Match the scheme with its launch date:
a. Digital India1. 16.1.2016
b. Startup India2. 1.7.2015
c. Stand-Up India3. 13.10.2021
d. PM GatiShakti4. 5.4.2016

Correct Answer: B [2 1 4 3]

Explanation:

Digital India 1.7.2015; Startup India 16.1.2016; Stand-Up India 5.4.2016; PM GatiShakti 13.10.2021.

4.  
Production Linked Incentive (PLI) schemes cover how many sectors?

Correct Answer: A [14]

Explanation:

14 sectors, ₹1.97 lakh crore. 8 = core industries in the old series (now 9); 25% = GDP target of the National Manufacturing Policy.

5.  
Match the event with its year:
a. Kandla EPZ1. 1984
b. Madras EPZ (MEPZ)2. 2015
c. SEZ policy3. 2000
d. Interest Equalisation Scheme4. 1965

Correct Answer: D [4 1 3 2]

Explanation:

Kandla EPZ 1965; Madras EPZ (MEPZ) 1984; SEZ policy 2000; Interest Equalisation Scheme 2015.

6.  
At least what share in a listed Indian company makes a foreign investment count as FDI?

Correct Answer: B [10%]

Explanation:

10% or more = FDI; less = FPI.

7.  
Match the epithet with the city:
a. Detroit of Asia1. Sivakasi
b. Manchester of South India2. Thoothukudi
c. Little Japan3. Chennai
d. Gateway of Tamil Nadu4. Coimbatore

Correct Answer: D [3 4 1 2]

Explanation:

Detroit of Asia – Chennai; Manchester of South India – Coimbatore; Little Japan – Sivakasi; Gateway of Tamil Nadu – Thoothukudi.

8.  
According to the Tamil Nadu Industrial Policy 2014, what is Tamil Nadu’s rank in gross industrial output?

Correct Answer: A [Third]

Explanation:

First in number of factories and workers; third in gross industrial output and net value added.

9.  
Assertion (A): The Second Five-Year Plan gave priority to heavy and capital goods industries.
Reason (R): The wage-goods model of C.N. Vakil and P.R. Brahmananda was the basis of the Second Plan.
கூற்று–காரண வினாக்களுக்கான தேர்வுகள்
(A) கூற்றும் காரணமும் சரி; காரணம் கூற்றுக்குச் சரியான விளக்கம்
(B) கூற்றும் காரணமும் சரி; ஆனால் காரணம் சரியான விளக்கம் அல்ல
(C) கூற்று சரி; காரணம் தவறு
(D) கூற்று தவறு; காரணம் சரி
Options for Assertion–Reason questions
(A) Both A and R are true; R is the correct explanation of A
(B) Both A and R are true; R is not the correct explanation of A
(C) A is true; R is false
(D) A is false; R is true

Correct Answer: C []

Explanation:

The Second Plan rested on the Mahalanobis model; the wage-goods model was offered as its alternative. A is true; R is false.

10.  
Which statements on the Industrial Policy Resolution, 1956 are correct?
  1. Its goal was the socialistic pattern of society.
  2. Schedule B industries were made the exclusive responsibility of the State at once.
  3. It is also called the “economic constitution of India”.

Correct Answer: B [1, 3 only]

Explanation:

Schedule B industries pass to the State only gradually; the private sector may also work alongside.

11.  
Assertion (A): The Industrial Policy of 1948 introduced a mixed economy in India.
Reason (R): It divided industries into four categories, giving room to the State as well as the private and co-operative sectors.

Correct Answer: A []

Explanation:

A mixed economy means State and private working together; the four-way division put it into practice. Both true; R explains A.

12.  
Which statements on the 1991 reforms are correct?
  1. The RBI’s Statutory Liquidity Ratio (SLR) was raised.
  2. Industrial licensing was abolished for all but 18 industries.
  3. Industries reserved for the public sector were cut from 17 to 8.

Correct Answer: B [2, 3 only]

Explanation:

SLR was cut from 38.5% to 25% on the Narasimham Committee's advice; a textbook saying it was "raised" is an error.

13.  
Which statements on disinvestment are correct?
  1. Selling shares of public sector enterprises is disinvestment.
  2. In a strategic sale, management control passes to the buyer along with the shares.
  3. Air India passed to private hands through a strategic sale in January 2022.

Correct Answer: A [1, 2, 3]

Explanation:

All three correct: selling PSE shares = disinvestment; with management control it is strategic sale; Air India to Tata, January 2022.

14.  
Assertion (A): TISCO is a public sector enterprise.
Reason (R): Iron and steel was included in Schedule A of the 1956 Industrial Policy.

Correct Answer: D []

Explanation:

TISCO was started privately in 1907 and is still private; iron and steel was in Schedule A, but existing private units continued. A false; R true.

15.  
Assertion (A): Online Udyam registration for MSMEs has been in force since 1.7.2020.
Reason (R): The MSME Development Act was enacted in 2006.

Correct Answer: B []

Explanation:

Both true. Udyam registration came with the new 2020 definition; the 2006 Act is not the reason for it.

16.  
Which statements on industrial indices are correct?
  1. The Index of Industrial Production (IIP) is released by the Ministry of Statistics and Programme Implementation.
  2. The current base year of the IIP is 2022-23.
  3. Iron ore is included in the new Index of Core Industries.

Correct Answer: A [1, 2, 3]

Explanation:

All three correct: MoSPI releases IIP; base year 2022-23 (from 1.6.2026); 9 core industries from 20.7.2026, iron ore newly added.

17.  
Assertion (A): The Atmanirbhar Bharat Abhiyan was announced on 12.5.2020.
Reason (R): The Abhiyan rests on nine pillars.

Correct Answer: C []

Explanation:

There are five pillars: economy, infrastructure, system, vibrant demography and demand. A is true; R is false.

18.  
Assertion (A): For customs purposes an SEZ is treated as foreign territory.
Reason (R): Reducing income inequality is the main objective of the SEZ Act.

Correct Answer: C []

Explanation:

The SEZ Act's five aims: extra economic activity, exports, investment, jobs, infrastructure; income equality is not one. A true; R false.

19.  
Which statements on Tamil Nadu’s industrial agencies are correct?
  1. TIIC was incorporated under the Companies Act in 1949.
  2. TIDCO was established in 1949.
  3. TANSIDCO was established by the Government of Tamil Nadu in 1970.

Correct Answer: A [1, 3 only]

Explanation:

TIDCO was set up in 1965; 1949 is TIIC's year.

20.  
Assertion (A): Hosur is a successful automobile and electronics cluster of Tamil Nadu.
Reason (R): The Hosur cluster arose on its own through private effort alone, without any government initiative.

Correct Answer: C []

Explanation:

Textbook: Hosur is a successful cluster "wholly created by Tamil Nadu" (expanded industrial estates). A is true; R is false.

? Full lessons and explanations – Indian Economy PDF textbook (₹299): www.shanmugamiasacademy.in/study-materials/tnpsc-gs-unit-5-indian-economy

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