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Industry and Infrastructure PYQs – Economics, SSC & Railway

350 Industry and Infrastructure (Economics) questions asked in recent SSC and Railway exams, newest first, with exam, date & shift, answers and solutions – page 2 of 4.

📚 350 questionsSSC 218 · Railway 132
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SSC MTS 2025 – 9 February 2026 Shift 1 · Make in India, Startup India and PLI

Q101. The National Capital Goods Policy in India was launched in _____.

  1. (a) 2013
  2. (b) 2016
  3. (c) 2019
  4. (d) 2021
Answer & solution

Answer: (b) 2016

Correct Answer: 2 (2016)
The National Capital Goods Policy was launched by the Government of India in 2016. It aims to increase production of capital goods from Rs 2.3 lakh crore (2014-15) to Rs 7.5 lakh crore by 2025, increase exports from 27% to 40% of production, and create an additional 30 lakh jobs in the capital goods sector. Capital goods are machinery and equipment used in the production of other goods.
Option 1 (2013) is incorrect.
Option 3 (2019) is incorrect - the candidate chose this wrong option.
Option 4 (2021) is incorrect.
SSC MTS 2025 – 9 February 2026 Shift 2 · Public sector undertakings (Maharatna, Navratna, Miniratna)

Q102. As of July 2025, Bharat Electronics Limited has been awarded with which of the following CPSE status?

  1. (a) Maharatna
  2. (b) Navratna
  3. (c) Miniratna -I
  4. (d) Miniratna -II
Answer & solution

Answer: (b) Navratna

As of July 2025,Bharat Electronics Limited (BEL)holds theNavratnaCentral Public Sector Enterprise (CPSE) status.
Important Points
CPSE Category: It functions as a prominentNavratna Defence Public Sector Undertaking (PSU).
Governing Body: BEL operates under the administrative authority of theMinistry of Defence, Government of India.
Core Operations: The enterprise designs and manufacturesadvanced aerospace and defence electronics, including radars, sonars, missile systems, and civilian Electronic Voting Machines (EVMs).
Autonomy Benefit: Holding theNavratna statusrewards the company with significantfinancial and operational independence, letting it invest and compete globally without requiring frequent government approvals.
SSC MTS 2025 – 6 February 2026 Shift 2 · Make in India, Startup India and PLI

Q103. Which of the following sector is NOT covered under Production Linked Incentive (PLI) scheme?

  1. (a) Manufacturing of Medical Devices
  2. (b) Leather Industry
  3. (c) Automobiles and Auto Components
  4. (d) Drones and Drone Components
Answer & solution

Answer: (b) Leather Industry

Correct Answer: 2 (Leather Industry)
The Production Linked Incentive (PLI) scheme covers 14 key sectors in India, including: Mobile phones, Pharmaceutical drugs, Medical devices, Automobiles and auto components, Advanced Chemistry Cell (ACC) batteries, Textile products, Food processing, Telecom & networking products, White goods (ACs & LEDs), Specialty steel, Solar PV modules, Drones and drone components, and others.
The Leather Industry is NOT among the sectors covered under the PLI scheme.
Option 1 (Medical Devices) is incorrect - Medical Devices ARE covered under PLI.
Option 3 (Automobiles and Auto Components) is incorrect - this IS covered under PLI.
Option 4 (Drones and Drone Components) is incorrect - Drones ARE covered under PLI.
SSC MTS 2025 – 5 February 2026 Shift 1 · Industrial Policy Resolutions (1948, 1956, 1991)

Q104. In India, which of the following statement is correct regarding Industrial Policy Resolution 1956?
I. It classified industries into three categories.
II. The first category comprised industries were exclusively reserved for private players.

  1. (a) Only I
  2. (b) Only II
  3. (c) Both I and II
  4. (d) Neither I nor II
Answer & solution

Answer: (a) Only I

Correct Answer: Only I
Statement I is CORRECT: The Industrial Policy Resolution (IPR) 1956 classified industries into three categories - Schedule A (reserved for public sector), Schedule B (mixed sector), and Schedule C (private sector).
Statement II is WRONG: The first category (Schedule A) was exclusively reserved for the PUBLIC sector (government), NOT for private players.
Since only Statement I is correct, the answer is Only I.
SSC MTS 2025 – 5 February 2026 Shift 3 · Industrial Policy Resolutions (1948, 1956, 1991)

Q105. In India, as per the Industrial Policy Resolution 1956, the second category consisted of industries in which the _____.

  1. (a) private sector could supplement the efforts of public sector
  2. (b) only foreign private sector would be entertained
  3. (c) public sector units had no role
  4. (d) private sector had sole authority to start new units
Answer & solution

Answer: (a) private sector could supplement the efforts of public sector

Correct Answer: private sector could supplement the efforts of public sector
Under IPR 1956, industries were classified into three categories:
Schedule A (1st category): Reserved exclusively for the public sector (government).
Schedule B (2nd category): Industries where the State would progressively establish new units, but private sector could also set up or expand units to supplement public sector efforts.
Schedule C (3rd category): Left open to the private sector.
Why other options are wrong:
Only foreign private sector - Not a category under IPR 1956.
Public sector had no role - Incorrect; public sector led Schedule B industries.
Private sector had sole authority - This describes Schedule C, not Schedule B.
Delhi Police Head Constable (Ministerial) 2025-26 – 12 January 2026 Shift 1 · Competition Commission of India

Q106. What was the central economic and regulatory objective of the Monopolies and Restrictive Trade Practices (MRTP) Act of 1969, and how did it reflect the ideological underpinnings of India's post- independence industrial policy?

  1. (a) To liberalize the Indian economy by encouraging large industrial houses to dominate global markets
  2. (b) To promote foreign direct investment by easing trade restrictions for multinational corporations
  3. (c) To prevent concentration of economic power and regulate anti-competitive practices, in alignment with India's commitment to a mixed economy and socialistic pattern of development
  4. (d) To eliminate all forms of government control over domestic industries and enable free-market pricing mechanisms
Answer & solution

Answer: (c) To prevent concentration of economic power and regulate anti-competitive practices, in alignment with India's commitment to a mixed economy and socialistic pattern of development

Option 3 is correct. The MRTP Act of 1969 was enacted to prevent the concentration of economic power in the hands of a few large industrial houses, control monopolistic and restrictive trade practices, and ensure that the growth of private sector did not undermine the socialistic pattern of development enshrined in India's economic policy and the Directive Principles of State Policy (Article 39).
• Option 1 is wrong: The MRTP Act was designed to restrict, not encourage, large industrial dominance.
• Option 2 is wrong: India's policy from 1947–1991 was protectionist and restricted FDI; the MRTP Act followed the same restrictive ideology.
• Option 4 is wrong: The MRTP Act increased government control over industrial practices, not eliminated it.
Delhi Police Head Constable (Ministerial) 2025-26 – 12 January 2026 Shift 2 · LPG reforms of 1991

Q107. What was the main reason for launching economic reforms in India in July 1991?

  1. (a) Trade surplus
  2. (b) Acute balance of payments crisis
  3. (c) High agricultural output
  4. (d) Booming exports
Answer & solution

Answer: (b) Acute balance of payments crisis

Acute balance of payments crisis is correct. By 1991, India faced a severe balance of payments (BOP) crisis — foreign exchange reserves had fallen to just about 2–3 weeks of import cover, forcing India to pledge 67 tonnes of gold to the Bank of England as collateral to secure an IMF loan. The crisis was caused by Gulf War oil price shocks, rising import bills, declining remittances, and fiscal mismanagement. This compelled PM Narasimha Rao and Finance Minister Dr. Manmohan Singh to launch landmark economic liberalization reforms.
• Trade surplus: India had a trade deficit, not a surplus, in 1991.
• High agricultural output: Agricultural performance was not the trigger; it was a macroeconomic financial crisis.
• Booming exports: India's exports were not booming in 1991; the BOP crisis was caused partly by export stagnation and high imports.
Delhi Police Head Constable (Ministerial) 2025-26 – 12 January 2026 Shift 3 · LPG reforms of 1991

Q108. Which of the following was a key feature of globalization reforms introduced in India after 1991?

  1. (a) Replacing dollar with rupee in exports
  2. (b) Increased role of multinational corporations
  3. (c) Nationalizing export houses
  4. (d) Restricting FDI to below 25% in all sectors
Answer & solution

Answer: (b) Increased role of multinational corporations

Increased role of multinational corporations is correct. Post-1991 globalization reforms in India included liberalizing FDI norms, reducing import duties, removing licensing restrictions, and opening multiple sectors to foreign investment. This led to a significant increase in the entry and role of multinational corporations (MNCs) in sectors like automobiles, consumer goods, telecom, IT, retail, and pharmaceuticals — fundamentally transforming India's economic landscape.
• Replacing dollar with rupee in exports: India does not replace the dollar with the rupee in international trade settlements; the US dollar remains the dominant global trade currency.
• Nationalizing export houses: This is the opposite of globalization reforms; 1991 reforms moved toward privatization and liberalization, not nationalization.
• Restricting FDI to below 25% in all sectors: Post-1991 reforms progressively raised FDI limits to 49%, 74%, 100% in various sectors — not restricted them.
Delhi Police Head Constable (Ministerial) 2025-26 – 10 January 2026 Shift 1 · Disinvestment

Q109. The concept of 'Minimum Government, Maximum Governance' can be traced to which aspect of the 1991 reforms?

  1. (a) Social sector expenditure increase
  2. (b) State-sponsored welfare capitalism
  3. (c) Disinvestment and reduced state role in business
  4. (d) Nationalization of critical industries
Answer & solution

Answer: (c) Disinvestment and reduced state role in business

The concept of 'Minimum Government, Maximum Governance' refers to reducing the state's direct commercial role while improving governance quality. In the 1991 LPG reforms, this was reflected in disinvestment (selling government stakes in Public Sector Undertakings) and reducing state interference in business activities.
(1) Increasing social sector expenditure expands the state's role, contrary to 'minimum government'.
(2) State-sponsored welfare capitalism increases state dependency, not reduces it.
(4) Nationalization increases state control over industries — the opposite of this principle.
Delhi Police Head Constable (Ministerial) 2025-26 – 10 January 2026 Shift 2 · LPG reforms of 1991

Q110. Who was the Finance Minister of India who initiated the 1991 economic reforms?

  1. (a) P. Chidambaram
  2. (b) Yashwant Sinha
  3. (c) Dr. Manmohan Singh
  4. (d) Pranab Mukherjee
Answer & solution

Answer: (c) Dr. Manmohan Singh

Dr. Manmohan Singh is correct. Dr. Manmohan Singh served as Finance Minister of India under Prime Minister P.V. Narasimha Rao from 1991 to 1996. He initiated the landmark 1991 economic liberalization reforms in response to India's severe balance of payments crisis. These reforms included devaluation of the rupee, dismantling the License Raj, opening the economy to foreign investment, and initiating privatization.
• P. Chidambaram: Served as Finance Minister in later years (1996–97, 2004–2008, 2008–2012); not the initiator of 1991 reforms.
• Yashwant Sinha: Served as Finance Minister under BJP governments (1990–91 briefly, and 1998–2002); not the 1991 liberalization reformer.
• Pranab Mukherjee: Served as Finance Minister during 1982–84 and 2009–2012; not the 1991 reformer.
Delhi Police Head Constable (Ministerial) 2025-26 – 9 January 2026 Shift 1 · LPG reforms of 1991

Q111. Which of the following correctly describes the term 'Liberalization' in the 1991 reforms?

  1. (a) Reduction in foreign exchange reserves
  2. (b) Removal of industrial licensing and price controls
  3. (c) Privatization of all public sector banks
  4. (d) Closing down of loss-making PSUs
Answer & solution

Answer: (b) Removal of industrial licensing and price controls

Correct Answer: Option 2 – Removal of industrial licensing and price controls
Liberalization in the context of India's 1991 LPG ( Liberalisation , Privatisation , Globalisation ) reforms primarily referred to:
• Abolition of the License Raj — removing the requirement for government licenses to start or expand industrial production.
• Removal of price controls in many sectors.
• Reducing government restrictions and regulations on private enterprise.
• Opening sectors previously reserved for the public sector to private companies.
• Allowing freer functioning of market forces in the economy.
Why other options are wrong:
Option 1 (Reduction in foreign exchange reserves): Liberalization is a policy framework — not about reducing forex reserves. In fact, the 1991 crisis involved critically low forex reserves, and reforms were aimed at rebuilding them.
Option 3 (Privatization of all PSBs): Privatization is a separate component of the LPG reforms. Moreover, not all public sector banks were privatized — only some were opened to private competition.
Option 4 (Closing loss-making PSUs): This relates more to privatization or disinvestment policy, not specifically to liberalization.
Delhi Police Head Constable (Ministerial) 2025-26 – 9 January 2026 Shift 2 · LPG reforms of 1991

Q112. Which of the following was NOT a direct feature of the 1991 economic reforms in India?

  1. (a) Abolition of industrial licensing for most sectors.
  2. (b) Introduction of FRBM Act to ensure fiscal discipline.
  3. (c) Devaluation of the Indian rupee.
  4. (d) Reduction in import tariffs and removal of quantitative restrictions.
Answer & solution

Answer: (b) Introduction of FRBM Act to ensure fiscal discipline.

The Fiscal Responsibility and Budget Management (FRBM) Act was enacted in 2003, not as part of the 1991 LPG reforms. The 1991 reforms included: (1) abolition of industrial licensing; (3) devaluation of the rupee; and (4) reduction of import tariffs. Option (2) is therefore NOT a feature of the 1991 reforms.
Delhi Police Head Constable (Ministerial) 2025-26 – 8 January 2026 Shift 1 · LPG reforms of 1991

Q113. What does liberalisation primarily refer to in the context of economic reforms?

  1. (a) Reducing government control
  2. (b) Nationalising banks
  3. (c) Promoting subsidies
  4. (d) Imposing trade tariffs
Answer & solution

Answer: (a) Reducing government control

Correct Answer: Option 1 – Reducing government control
Liberalisation refers to the process of relaxing or removing government restrictions, regulations, and controls on economic activities. In the context of India's 1991 LPG ( Liberalisation , Privatisation , Globalisation ) reforms, liberalisation meant:
• Removing industrial licensing (License Raj)
• Easing entry of private and foreign firms
• Reducing government intervention in pricing and production
• Freeing financial markets and trade policies
The goal is to allow market forces to operate more freely.
Why other options are wrong:
Option 2 ( Nationalising banks): Bank nationalisation is the opposite of liberalisation — it increases government control, not reduces it.
Option 3 (Promoting subsidies): Subsidies are government interventions; liberalisation aims to reduce such interventions.
Option 4 (Imposing trade tariffs): Trade tariffs are protectionist measures that restrict trade. Liberalisation promotes free trade by reducing tariffs.
Delhi Police Head Constable (Ministerial) 2025-26 – 8 January 2026 Shift 1 · Industrial Policy Resolutions (1948, 1956, 1991)

Q114. The Industrial Policy Resolution of 1956 significantly emphasized the role of which sector in India's industrialization?

  1. (a) Private sector, with minimal government intervention
  2. (b) Cooperative sector, with decentralized production
  3. (c) Public sector, as the primary engine of growth
  4. (d) Joint sector, with equal partnership between state and private entities
Answer & solution

Answer: (c) Public sector, as the primary engine of growth

Correct Answer: Option 3 – Public sector, as the primary engine of growth
The Industrial Policy Resolution (IPR) of 1956, also called the 'Economic Constitution of India', classified industries into three schedules:
• Schedule A: 17 industries exclusively reserved for the Public Sector (e.g., defence , atomic energy, railways, iron and steel, heavy machinery).
• Schedule B: 12 industries where public sector would take the lead but private sector could supplement.
• Schedule C: Remaining industries left to the private sector.
The 1956 policy was heavily influenced by socialist ideology and the Nehru- Mahalanobis model, placing the public sector as the primary driver of industrial growth.
Why other options are wrong:
Option 1 (Private sector): The 1956 IPR restricted the private sector to Schedule C industries only.
Option 2 (Cooperative sector): The cooperative sector was not a focus of the 1956 IPR.
Option 4 (Joint sector): Equal partnership was not the framework; public sector dominance was the central theme.
Delhi Police Head Constable (Ministerial) 2025-26 – 8 January 2026 Shift 3 · LPG reforms of 1991

Q115. What does globalisation mean in the context of the Indian economy post-1991 reforms?

  1. (a) Increasing import duties
  2. (b) Integrating with world economy
  3. (c) Reducing FDI inflows
  4. (d) Disallowing foreign banks
Answer & solution

Answer: (b) Integrating with world economy

Correct Answer: Option 2 – Integrating with world economy
Globalisation, in the context of India's 1991 LPG reforms (Liberalisation, Privatisation, Globalisation), refers to the integration of the Indian economy with the global economy. This involved:
• Reduction of import duties and trade barriers
• Allowing Foreign Direct Investment (FDI) in multiple sectors
• Allowing foreign banks and financial institutions to operate in India
• Opening Indian markets to global competition
• Enabling Indian companies to access international markets and capital
• Adopting international standards in trade, finance, and production
Why other options are wrong:
Option 1 (Increasing import duties): Globalisation involves REDUCING import duties, not increasing them.
Option 3 (Reducing FDI inflows): Globalisation promotes FDI inflows, not reduces them.
Option 4 (Disallowing foreign banks): Globalisation allows foreign banks to enter India — it does not disallow them.
Delhi Police Head Constable (Ministerial) 2025-26 – 7 January 2026 Shift 1 · LPG reforms of 1991

Q116. India's announcement of the New Economic Policy (NEP) was a direct consequence of agreeing to conditionalities set by which two international organizations?

  1. (a) Asian Development Bank (ADB) and New Development Bank (NDB)
  2. (b) World Trade Organization (WTO) and United Nations (UN)
  3. (c) World Bank and International Monetary Fund (IMF)
  4. (d) European Union (EU) and G20 Summit
Answer & solution

Answer: (c) World Bank and International Monetary Fund (IMF)

Correct Answer: Option 3 – World Bank and International Monetary Fund (IMF)
In 1991, India faced a severe Balance of Payments ( BoP ) crisis and had to pledge gold to secure emergency loans. India approached the World Bank and the International Monetary Fund (IMF) for financial assistance. As a condition for the loan (structural adjustment), the IMF and World Bank required India to implement economic liberalisation reforms. This led to the announcement of the New Economic Policy (NEP) in 1991 under Finance Minister Dr. Manmohan Singh, featuring Liberalisation , Privatisation , and Globalisation (LPG reforms).
Why other options are wrong:
Option 1 (ADB and NDB): ADB played a minor role; NDB did not even exist in 1991.
Option 2 (WTO and UN): WTO was established in 1995; it had no role in the 1991 NEP. The UN does not set economic conditionalities.
Option 4 (EU and G20): Neither was involved in India's 1991 economic reforms.
Delhi Police Head Constable (Ministerial) 2025-26 – 7 January 2026 Shift 2 · Make in India, Startup India and PLI

Q117. Which of the following best reflects a critical economic challenge in the implementation of the Atmanirbhar Bharat Abhiyan,
particularly in achieving long-term self-reliance across key sectors?

  1. (a) Excessive reliance on foreign direct investment (FDI) to fund domestic innovation
  2. (b) Overproduction in agriculture due to Atmanirbhar Bharat policies
  3. (c) Increase in India's trade surplus with China
  4. (d) Full substitution of imported medical devices within two years of the policy's launch
Answer & solution

Answer: (a) Excessive reliance on foreign direct investment (FDI) to fund domestic innovation

Correct Answer: Option 1 – Excessive reliance on FDI to fund domestic innovation
A key criticism and challenge in the Atmanirbhar Bharat Abhiyan (Self-Reliant India Mission) is that while it aims to promote self-reliance and reduce import dependency, India continues to heavily rely on Foreign Direct Investment (FDI) to fund domestic innovation and manufacturing. This creates a paradox: the goal of self-reliance is undermined when the innovation and capital base itself depends on foreign investment, particularly in critical sectors like electronics, semiconductors, defence, and pharmaceuticals.
Why other options are wrong:
Option 2 (Overproduction in agriculture): Atmanirbhar Bharat does not specifically cause overproduction in agriculture; this is not a documented challenge.
Option 3 (Trade surplus with China): India actually has a large trade DEFICIT with China, not a surplus. This deficit is one of the problems Atmanirbhar Bharat aims to address.
Option 4 (Full substitution of medical devices in two years): This is not a stated goal or outcome of the policy; full substitution within two years was not achieved or promised.
Delhi Police Head Constable (Ministerial) 2025-26 – 7 January 2026 Shift 2 · LPG reforms of 1991

Q118. Which of the following measures was taken to reform the external sector in 1991?

  1. (a) Introduction of capital account convertibility
  2. (b) Replacement of Import Substitution by Export Promotion
  3. (c) Complete deregulation of foreign investment
  4. (d) Withdrawal from the WTO
Answer & solution

Answer: (b) Replacement of Import Substitution by Export Promotion

Correct Answer: Option 2 – Replacement of Import Substitution by Export Promotion
In 1991, as part of the New Economic Policy (LPG reforms), India shifted its external sector strategy from Import Substitution (producing domestically what was previously imported, with heavy tariffs and quotas) to Export Promotion (liberalising trade, reducing tariffs, devaluing the rupee to make exports competitive, and integrating with global markets). This was a fundamental change in India's trade policy.
Why other options are wrong:
Option 1 (Capital account convertibility): Full capital account convertibility was NOT introduced in 1991. India maintains partial convertibility on the capital account even today.
Option 3 (Complete deregulation of foreign investment): Foreign investment was liberalised significantly but NOT completely deregulated. Sectoral caps and conditions remained.
Option 4 (Withdrawal from WTO): India did not withdraw from WTO. In fact, India was a founding member of WTO in 1995 and supports multilateral trade.
Delhi Police Constable (Exe) 2025-26 – 5 January 2026 Shift 1 · Classification of industries (size, ownership, raw material)

Q119. What is the primary objective of a company operating in the 'Private Sector'?

  1. (a) Social welfare
  2. (b) To make a profit
  3. (c) To follow government orders
  4. (d) To provide free services
Answer & solution

Answer: (b) To make a profit

The correct answer is (b) To make a profit.
Private sector companies are owned by private individuals or shareholders and their primary objective is profit maximization. They operate in competitive markets driven by the motive of earning returns for their owners and shareholders.
(a) Social welfare: This is the primary motive of public sector enterprises, not private companies.
(c) To follow government orders: Private sector companies operate independently; they are not bound to follow government orders (though they must comply with laws).
(d) To provide free services: Not the motive of private companies; they charge market prices for goods and services.
Delhi Police Constable (Exe) 2025-26 – 5 January 2026 Shift 1 · Public sector undertakings (Maharatna, Navratna, Miniratna)

Q120. What is the primary motive of a 'Public Sector' enterprise?

  1. (a) To make a profit only
  2. (b) Social welfare and providing services
  3. (c) To compete with foreign companies
  4. (d) To export goods
Answer & solution

Answer: (b) Social welfare and providing services

The correct answer is (b) Social welfare and providing services.
Public sector enterprises (owned by the government) primarily aim to provide essential goods and services to society, achieve social welfare, promote balanced regional development, and work in the national interest rather than solely for profit.
(a) To make a profit only: This is the private sector's primary motive; public enterprises may earn profits but it is not their primary goal.
(c) To compete with foreign companies: While some public enterprises may face foreign competition, this is not their primary motive.
(d) To export goods: Not the primary motive of public sector enterprises.
Delhi Police Constable (Exe) 2025-26 – 5 January 2026 Shift 3 · Make in India, Startup India and PLI

Q121. Which mission emphasizes research, innovation, market development, skilling, and export promotion in the field of technical textiles?

  1. (a) National Advanced Fibres and Materials Mission (NAFMM)
  2. (b) National Technical Textiles Mission (NTTM)
  3. (c) Strategic Textile Innovation and Competitiveness Mission (STICM)
  4. (d) Integrated Smart Textiles Development Mission (ISTDM)
Answer & solution

Answer: (b) National Technical Textiles Mission (NTTM)

The correct answer is (b) National Technical Textiles Mission (NTTM).
The National Technical Textiles Mission (NTTM) was launched in 2020 with a budget of ₹1,480 crore. It focuses on research and innovation, market development, promotion and market development, export promotion, and skilling and education in technical textiles — textiles used in agriculture, medical, geo-textiles, defence , space, and infrastructure sectors.
(a) NAFMM: Focuses on advanced fibres and materials; different from the NTTM's specific focus on technical textiles.
(c) STICM: Not the standard government mission name for technical textiles promotion.
(d) ISTDM: Not the standard government mission name for this purpose.
Delhi Police Constable (Exe) 2025-26 – 4 January 2026 Shift 2 · LPG reforms of 1991

Q122. In the context of India's 1991 economic reforms, what does 'LPG' stand for?

  1. (a) Liberalization, Privatization, Globalization
  2. (b) Liberalization, Production, Globalization
  3. (c) Labour , Privatization, Globalization
  4. (d) Liberalization, Privatization, Growth
Answer & solution

Answer: (a) Liberalization, Privatization, Globalization

LPG in the economic context refers to Liberalization (removing trade barriers and regulations), Privatization (transferring state-owned enterprises to private ownership), and Globalization (integrating the Indian economy with the world economy), the three pillars of the 1991 economic reforms.
(b) Incorrect: 'Production' is not a component of the LPG economic framework.
(c) Incorrect: ' Labour ' is not part of the LPG acronym in this context.
(d) Incorrect: 'Growth' is not part of the LPG acronym for India's economic reforms.
Delhi Police Constable (Exe) 2025-26 – 4 January 2026 Shift 2 · Make in India, Startup India and PLI

Q123. How many PM MITRA (Pradhan Mantri Mega Integrated Textile Region and Apparel) Parks were approved by the Indian government?

  1. (a) 5
  2. (b) 6
  3. (c) 7
  4. (d) 10
Answer & solution

Answer: (c) 7

The Indian government approved 7 PM MITRA Parks across India to develop world-class integrated textile manufacturing ecosystems with plug-and-play infrastructure, supporting the entire textile value chain in one location.
(a) Incorrect: 5 PM MITRA Parks were not the number approved by the government.
(b) Incorrect: 6 PM MITRA Parks is not the correct figure.
(d) Incorrect: 10 PM MITRA Parks were not approved.
Delhi Police Constable (Exe) 2025-26 – 3 January 2026 Shift 3 · LPG reforms of 1991

Q124. Which of the following was not a primary objective of the 1991 economic reforms?

  1. (a) To increase inflation
  2. (b) To integrate with the world economy
  3. (c) To reduce government control
  4. (d) To improve the Balance of Payments
Answer & solution

Answer: (a) To increase inflation

The 1991 economic reforms (LPG — Liberalization, Privatization, Globalization) aimed to integrate India with the world economy, reduce government control through privatization, and address the severe Balance of Payments crisis. Increasing inflation was never an objective — in fact, controlling inflation was a priority.
(a) Incorrect: Integrating with the world economy (Globalization) was a key pillar of the 1991 reforms.
(b) Incorrect: Reducing government control (Liberalization and Privatization) was central to the 1991 reform agenda.
(c) Incorrect: Improving the Balance of Payments was the immediate crisis trigger for the 1991 reforms.
Delhi Police Constable (Exe) 2025-26 – 2 January 2026 Shift 3 · Disinvestment

Q125. The 'Disinvestment Commission', set up in 1996 under G.V. Ramakrishna, was tasked with advising the government on?

  1. (a) Buying new companies
  2. (b) Fixing interest rates
  3. (c) Closing down banks
  4. (d) Privatization and selling shares of PSUs
Answer & solution

Answer: (d) Privatization and selling shares of PSUs

The Disinvestment Commission, established in 1996 under the chairmanship of G.V. Ramakrishna, was set up to advise the Indian government on disinvestment strategies — specifically on privatization and selling government stakes (shares) in Public Sector Undertakings (PSUs) to private investors.
(a) Incorrect: Buying new companies is the opposite of disinvestment; the commission was set up to divest (sell), not acquire.
(b) Incorrect: Fixing interest rates is the function of the Reserve Bank of India's Monetary Policy Committee, not the Disinvestment Commission.
(c) Incorrect: Closing down banks is a banking regulatory matter handled by RBI and government; it is not the mandate of the Disinvestment Commission.
Delhi Police Constable (Exe) 2025-26 – 30 December 2025 Shift 1 · MSME sector

Q126. The 'Karve Committee', constituted in 1955, is specifically associated with the development of which sector?

  1. (a) Heavy Industries
  2. (b) Small-Scale Industries
  3. (c) Agriculture
  4. (d) Banking
Answer & solution

Answer: (b) Small-Scale Industries

The Karve Committee (officially the Village and Small-Scale Industries Committee), constituted in 1955 under the chairmanship of D.G. Karve, was tasked with studying and recommending policies for the promotion and development of small-scale and cottage industries in India. Its recommendations shaped India's industrial policy regarding small industries.
(a) Incorrect: Heavy Industries were promoted through the Second Five-Year Plan based on the Nehru- Mahalanobis model; this was not the focus of the Karve Committee.
(c) Incorrect: Agriculture was addressed through the Community Development Programme and other committees; the Karve Committee specifically focused on small-scale industries.
(d) Incorrect: The banking sector was studied by the All India Rural Credit Survey (1954) and later the Narasimham Committee; the Karve Committee focused on small-scale industries, not banking.
Delhi Police Constable (Exe) 2025-26 – 30 December 2025 Shift 1 · Industrial Policy Resolutions (1948, 1956, 1991)

Q127. Which specific industry is still reserved for the Public Sector and has not been fully opened to the private sector?

  1. (a) Textiles
  2. (b) Automobiles
  3. (c) Atomic Energy
  4. (d) Tourism
Answer & solution

Answer: (c) Atomic Energy

Atomic Energy remains reserved exclusively for the Public Sector in India under the Atomic Energy Act, 1962. The government has maintained state monopoly over nuclear power and atomic energy generation, unlike most other industries that were delicensed after the 1991 economic liberalization. Currently, only one industry — atomic energy — remains in the public sector reserved list.
(a) Incorrect: The Textiles industry has been fully open to private sector participation and delicensed since 1991; it is not reserved for the public sector.
(b) Incorrect: The Automobile industry has been completely opened to private and foreign investment; major private players like Tata, Maruti, and foreign OEMs operate freely.
(d) Incorrect: Tourism has been fully open to the private sector; there is no reservation of tourism for the public sector.
Delhi Police Constable (Exe) 2025-26 – 30 December 2025 Shift 2 · Public sector undertakings (Maharatna, Navratna, Miniratna)

Q128. The 'Coal Mines (Nationalisation) Act' was passed in which year, bringing the coal sector under government control?

  1. (a) 1956
  2. (b) 1969
  3. (c) 1973
  4. (d) 1991
Answer & solution

Answer: (c) 1973

The Coal Mines (Nationalisation) Act was enacted in 1973, bringing all coal mines in India under government control. This was done to ensure systematic and scientific development of coal reserves for national benefit.
(a) Incorrect: 1956 was the year of the Industrial Policy Resolution and nationalization of the life insurance sector, not coal mines.
(b) Incorrect: 1969 saw the nationalization of 14 major banks, not coal mines.
(d) Incorrect: 1991 was the year of economic liberalization reforms, not coal mine nationalization.
Delhi Police Constable (Exe) 2025-26 – 30 December 2025 Shift 2 · LPG reforms of 1991

Q129. Who was the Finance Minister of India credited as the architect of the 1991 reforms?

  1. (a) P. Chidambaram
  2. (b) Yashwant Sinha
  3. (c) Manmohan Singh
  4. (d) Pranab Mukherjee
Answer & solution

Answer: (c) Manmohan Singh

Dr. Manmohan Singh, as Finance Minister of India in 1991 under Prime Minister P. V. Narasimha Rao, introduced landmark economic reforms that liberalized India's economy and moved away from the License Raj. He is widely regarded as the architect of the 1991 reforms.
(a) Incorrect: P. Chidambaram served as Finance Minister in later years (1996-98, 2004-08, 2012-14), not during the 1991 reforms.
(b) Incorrect: Yashwant Sinha served as Finance Minister under the BJP government in 1998-2002, not in 1991.
(d) Incorrect: Pranab Mukherjee served as Finance Minister in 1982-84 and 2009-12 and later became President, but was not associated with the 1991 reforms.
Delhi Police Constable (Exe) 2025-26 – 30 December 2025 Shift 2 · LPG reforms of 1991

Q130. To get an emergency loan in 1991, India had to approach which international organization?

  1. (a) United Nations (UN)
  2. (b) International Monetary Fund (IMF)
  3. (c) World Trade Organization (WTO)
  4. (d) SAARC
Answer & solution

Answer: (b) International Monetary Fund (IMF)

During the severe balance of payments crisis of 1991, India approached the International Monetary Fund (IMF) for emergency loans. India also pledged 67 tonnes of gold as collateral to secure foreign exchange.
(a) Incorrect: The United Nations (UN) is a political and humanitarian organization; it does not provide emergency balance-of-payments loans.
(c) Incorrect: The World Trade Organization (WTO) governs international trade rules but does not provide emergency loans.
(d) Incorrect: SAARC is a regional cooperation organization with no financial lending capacity for balance-of-payments crises.
Delhi Police Constable (Exe) 2025-26 – 29 December 2025 Shift 1 · Disinvestment

Q131. What is 'disinvestment'?

  1. (a) The act of investing more money
  2. (b) The act of the government selling its shares in a public sector company
  3. (c) The act of shutting down a company
  4. (d) The act of taking a loan
Answer & solution

Answer: (b) The act of the government selling its shares in a public sector company

Disinvestment refers to the process by which the government sells its equity (shares) in public sector enterprises, either partially or completely, to private buyers. It helps raise revenue and reduces the government's role in commercial activities.
(a) Incorrect: That describes investment, not disinvestment.
(c) Incorrect: Shutting down a company is 'winding up' or 'liquidation.'
(d) Incorrect: Taking a loan is 'borrowing,' not disinvestment.
Delhi Police Constable (Exe) 2025-26 – 29 December 2025 Shift 1 · LPG reforms of 1991

Q132. A major criticism of the 1991 reforms is that they benefited which sector the least?

  1. (a) Agriculture
  2. (b) Services (IT)
  3. (c) Manufacturing
  4. (d) Banking
Answer & solution

Answer: (a) Agriculture

A major criticism of the 1991 LPG ( Liberalisation , Privatisation , Globalisation ) reforms is that the agriculture sector benefited the least. While IT, services, manufacturing, and banking flourished, agriculture remained largely outside the formal market reforms and continued to face issues like low productivity, farmer debt, and inadequate infrastructure.
(b) Incorrect: The Services (IT) sector benefited enormously from liberalisation .
(c) Incorrect: Manufacturing also benefited significantly from reduced import duties and FDI.
(d) Incorrect: The banking sector benefited from financial sector reforms.
Delhi Police Constable (Exe) 2025-26 – 29 December 2025 Shift 1 · LPG reforms of 1991

Q133. To secure an emergency loan in 1991, India had to pledge (mortgage) what valuable asset to international banks?

  1. (a) The Taj Mahal
  2. (b) Gold Reserves
  3. (c) Parliament Building
  4. (d) Shares in Indian Railways
Answer & solution

Answer: (b) Gold Reserves

During India's 1991 Balance of Payments crisis, the government physically airlifted and pledged approximately 67 tonnes of gold to the Bank of England and Bank of Japan to secure emergency loans from the IMF totalling about $2.2 billion. This drastic step led to major economic reforms.
(a) Incorrect: The Taj Mahal was never pledged.
(c) Incorrect: Parliament Building was never used as collateral.
(d) Incorrect: Railway shares were not pledged to international banks.
Delhi Police Constable (Exe) 2025-26 – 29 December 2025 Shift 2 · Public sector undertakings (Maharatna, Navratna, Miniratna)

Q134. In which year was Air India nationalized by the Indian Government?

  1. (a) 1947
  2. (b) 1950
  3. (c) 1953
  4. (d) 1960
Answer & solution

Answer: (c) 1953

Air India was nationalized in 1953 under the Air Corporations Act, 1953, during the tenure of Prime Minister Jawaharlal Nehru. The government merged all existing airlines (including Tata Airlines which became Air India) into two corporations: Indian Airlines (for domestic routes) and Air India (for international routes).
(a) Incorrect: 1947 was the year of India's independence, not Air India's nationalisation .
(b) Incorrect: Air India was not nationalised in 1950; the Act was passed in 1953.
(d) Incorrect: 1960 is not the correct year of nationalisation .
Delhi Police Constable (Exe) 2025-26 – 29 December 2025 Shift 2 · LPG reforms of 1991

Q135. In which year did India launch its landmark 'New Economic Policy' (NEP), which introduced Liberalisation , Privatisation , and Globalisation (LPG) reforms?

  1. (a) 1985
  2. (b) 1991
  3. (c) 1995
  4. (d) 2001
Answer & solution

Answer: (b) 1991

India launched its New Economic Policy in 1991, under Finance Minister Dr. Manmohan Singh and Prime Minister P.V. Narasimha Rao. The policy introduced Liberalisation (removing industrial licences and controls), Privatisation (disinvestment of PSUs), and Globalisation (opening markets to foreign investment and trade). This was triggered by a severe balance-of-payments crisis.
(a) Incorrect: 1985 saw some limited reforms under Rajiv Gandhi's government but not the full NEP.
(c) Incorrect: 1995 was not the year of the NEP launch; it was a year of further implementation.
(d) Incorrect: 2001 saw reforms in the telecom sector but was not the year of the NEP launch.
Delhi Police Constable (Exe) 2025-26 – 29 December 2025 Shift 3 · Disinvestment

Q136. The sale of 'BALCO' (Bharat Aluminium Company) in 2001 to a private company is an example of?

  1. (a) Liberalization
  2. (b) Privatization
  3. (c) Globalization
  4. (d) Nationalization
Answer & solution

Answer: (b) Privatization

The sale of BALCO (Bharat Aluminium Company) in 2001 to Sterlite Industries (part of Vedanta Group) is a classic example of Privatization — the process by which the government sells its equity in public sector undertakings to private parties. The government sold its 51% stake in BALCO for Rs 551.5 crore.
(a) Incorrect: Liberalization means removing government controls and restrictions from businesses; it is not about selling government assets.
(c) Incorrect: Globalization refers to integration of economies; it does not mean selling PSUs.
(d) Incorrect: Nationalization is the reverse process — government taking over private companies (e.g., bank nationalization in 1969).
Delhi Police Constable (Exe) 2025-26 – 24 December 2025 Shift 1 · LPG reforms of 1991

Q137. What term refers to the process of rapid integration or interconnection between countries due to greater foreign investment, trade, and movement of goods, services, and technology?

  1. (a) Glocalization
  2. (b) Globalization
  3. (c) Localization
  4. (d) Segregation
Answer & solution

Answer: (b) Globalization

The correct answer is Globalization (Option 2).
Globalization is the process of rapid integration and interconnection between countries facilitated by greater foreign investment, international trade, and the movement of goods, services, capital, and technology across national borders, creating an increasingly interdependent global economy.
Option 1 - Glocalization: Glocalization is the practice of adapting globally available products or services to local cultures and tastes; it is distinct from globalization.
Option 3 - Localization: Localization refers to adapting a product or content to a specific local market, the opposite direction to globalization.
Option 4 - Segregation: Segregation refers to the separation or isolation of groups; it is the antithesis of integration and interconnection.
Delhi Police Constable (Exe) 2025-26 – 24 December 2025 Shift 2 · Disinvestment

Q138. What is the primary goal of privatisation ?

  1. (a) To increase government control over public sector enterprises.
  2. (b) To improve financial discipline and facilitate modernisation .
  3. (c) To nationalize private companies and bring them under government control.
  4. (d) To restrict the role of private capital in the economy.
Answer & solution

Answer: (b) To improve financial discipline and facilitate modernisation .

The correct answer is To improve financial discipline and facilitate modernisation (Option 2).
The primary goal of privatisation is to improve financial discipline and operational efficiency in enterprises by transferring ownership and management from the government to private entities. Privatisation also facilitates modernisation by attracting private investment, better management practices, and technological upgradation.
Option 1 - Increase government control: Privatisation does the opposite — it reduces government control over enterprises.
Option 3 - Nationalise private companies: Nationalisation is the opposite of privatisation ; it involves bringing private companies under government ownership.
Option 4 - Restrict private capital: Privatisation encourages private capital participation; restricting it contradicts the privatisation objective.
Delhi Police Constable (Exe) 2025-26 – 24 December 2025 Shift 3 · LPG reforms of 1991

Q139. What is one of the main reasons for the slowdown in industrial growth in India after 1991?

  1. (a) Increasing demand for industrial products
  2. (b) Reduced industrial product demand from cheaper imports.
  3. (c) Increased domestic investment in infrastructure
  4. (d) Improved power supply and infrastructure
Answer & solution

Answer: (b) Reduced industrial product demand from cheaper imports.

The correct answer is Reduced industrial product demand from cheaper imports (Option 2).
After the 1991 liberalisation , India opened its markets to foreign competition. Cheaper imported goods flooded the domestic market, reducing demand for domestically produced industrial goods. Many industries (especially labour-intensive ones) faced intense competition from cheaper Chinese and other imports, slowing industrial growth.
Option 1 - Increasing demand for industrial products: The period post-1991 saw stagnating domestic demand for some industrial goods due to import competition; increasing demand is the opposite of what caused slowdown.
Option 3 - Increased domestic investment in infrastructure: Infrastructure investment would support industrial growth, not cause slowdown.
Option 4 - Improved power supply and infrastructure: Improved infrastructure generally helps industrial growth rather than slowing it.
Delhi Police Constable (Exe) 2025-26 – 23 December 2025 Shift 1 · Disinvestment

Q140. The role of disinvestment in the post-1991 period was:

  1. (a) To nationalize private companies
  2. (b) To reduce the government's stake in non-strategic public sector undertakings and improve efficiency
  3. (c) To increase public debt
  4. (d) To finance social programs
Answer & solution

Answer: (b) To reduce the government's stake in non-strategic public sector undertakings and improve efficiency

The correct answer is To reduce the government's stake in non-strategic PSUs and improve efficiency (Option 2).
Post-1991 economic liberalization introduced disinvestment as a key policy to reduce the government's shareholding in non-strategic public sector undertakings (PSUs), improve their efficiency through market competition, and generate revenue for the government.
Option 1 - To nationalize private companies: Nationalization is the opposite of disinvestment; post-1991 reforms moved toward privatization, not nationalization.
Option 3 - To increase public debt: Disinvestment actually generates funds for the government, potentially reducing the need for borrowing.
Option 4 - To finance social programs: While disinvestment proceeds can be used for various purposes, its primary role is reducing government stake in PSUs and improving efficiency.
Delhi Police Constable (Exe) 2025-26 – 23 December 2025 Shift 1 · Industrial Policy Resolutions (1948, 1956, 1991)

Q141. What was emphasized in the Industrial Policy Resolution of 1956?

  1. (a) Private sector monopoly
  2. (b) Promotion of foreign multinational corporations
  3. (c) Complete nationalization of all industries
  4. (d) Mixed economy with a large role for the public sector in heavy industries
Answer & solution

Answer: (d) Mixed economy with a large role for the public sector in heavy industries

The correct answer is Mixed economy with a large role for the public sector in heavy industries (Option 4).
The Industrial Policy Resolution of 1956 established a framework of a mixed economy in India, assigning a dominant role to the public sector in heavy industries (steel, mining, defense, energy) while allowing the private sector in other areas. It classified industries into three schedules based on state control.
Option 1 - Private sector monopoly: The 1956 Resolution explicitly restricted private sector participation in strategic industries, giving the public sector the leading role.
Option 2 - Promotion of foreign multinationals: The 1956 policy was focused on domestic industry development, not promoting foreign corporations.
Option 3 - Complete nationalization of all industries: Only certain strategic industries were reserved for the public sector; the private sector was permitted in others.
Delhi Police Constable (Exe) 2025-26 – 23 December 2025 Shift 2 · LPG reforms of 1991

Q142. What is the primary role of foreign trade in the context of globalisation ?

  1. (a) To create a monopoly for producers
  2. (b) To restrict the movement of goods
  3. (c) To connect markets across countries
  4. (d) To increase the cost of production
Answer & solution

Answer: (c) To connect markets across countries

The correct answer is To connect markets across countries (Option 3).
Foreign trade is the exchange of goods and services across national borders. In the context of globalisation , its primary role is to connect markets of different countries, enabling international competition, specialisation , and economic integration.
Option 1 - To create a monopoly for producers: Foreign trade actually increases competition among producers globally, reducing monopolistic tendencies.
Option 2 - To restrict the movement of goods: This is the opposite of foreign trade's purpose; trade restrictions (tariffs, quotas) are barriers to trade, not its purpose.
Option 4 - To increase the cost of production: Foreign trade typically reduces production costs through access to cheaper raw materials and labour ; it does not aim to increase production costs.
Delhi Police Constable (Exe) 2025-26 – 23 December 2025 Shift 2 · Industrial Policy Resolutions (1948, 1956, 1991)

Q143. Which industry stayed under government control after the 1991 deregulation?

  1. (a) Retail and textiles
  2. (b) Atomic energy and railway transport
  3. (c) Electronics and pharmaceuticals
  4. (d) Small-scale manufacturing
Answer & solution

Answer: (b) Atomic energy and railway transport

The correct answer is Atomic energy and railway transport (Option 2).
After the 1991 economic liberalisation and deregulation in India, most industries were opened to private participation. However, strategic sectors like atomic energy (governed by the Atomic Energy Act) and railway transport remained under exclusive government control due to their national security and public service importance.
Option 1 - Retail and textiles: These sectors were opened to private and foreign investment progressively after 1991.
Option 3 - Electronics and pharmaceuticals: These industries were liberalised and are now largely private-sector driven.
Option 4 - Small-scale manufacturing: Small-scale industries were also subject to deregulation and private participation.
Delhi Police Constable (Exe) 2025-26 – 23 December 2025 Shift 3 · LPG reforms of 1991

Q144. How is globalization best described in the Indian context after 1991?

  1. (a) A policy of promoting complete economic self-reliance
  2. (b) An inward-looking trade strategy
  3. (c) Integration of domestic markets with the global economy through trade, investment, and technology
  4. (d) Limiting foreign capital flows to protect domestic industries
Answer & solution

Answer: (c) Integration of domestic markets with the global economy through trade, investment, and technology

The correct answer is Integration of domestic markets with the global economy through trade, investment, and technology (Option 3).
After the 1991 economic reforms (LPG - Liberalisation , Privatisation , Globalisation ), India integrated its economy with the global economy by opening markets, inviting foreign investment, and adopting new technologies. This replaced the earlier inward-looking protectionist approach.
Option 1 - Complete economic self-reliance: This describes the pre-1991 approach of import substitution and self-sufficiency, which was reversed by the 1991 reforms.
Option 2 - Inward-looking trade strategy: This describes protectionism, the opposite of the globalization policy adopted post-1991.
Option 4 - Limiting foreign capital flows: Post-1991 India actively encouraged FDI and foreign capital, not limited it.
Delhi Police Constable (Exe) 2025-26 – 23 December 2025 Shift 3 · LPG reforms of 1991

Q145. What has been a significant result of globalisation in terms of consumer markets?

  1. (a) Reduced market competition
  2. (b) Increased consumer choice
  3. (c) Diminished product quality
  4. (d) Lower product availability
Answer & solution

Answer: (b) Increased consumer choice

The correct answer is Increased consumer choice (Option 2).
A key result of globalisation is that consumers have access to a much wider variety of goods and services from across the world. Markets now offer products from multiple countries, brands, and price ranges, greatly expanding consumer choice.
Option 1 - Reduced market competition: Globalisation actually increases market competition as domestic companies compete with foreign firms, benefiting consumers.
Option 3 - Diminished product quality: Competition from globalisation typically improves product quality, as companies must maintain standards to survive in global markets.
Option 4 - Lower product availability: Globalisation increases product availability by opening up trade and supply chains worldwide.
Delhi Police Constable (Exe) 2025-26 – 23 December 2025 Shift 3 · LPG reforms of 1991

Q146. In 1991, India faced an economic crisis primarily due to which of the following issues?

  1. (a) High inflation and a sharp fall in the value of the rupee
  2. (b) Inability to repay external debt and critical depletion of foreign exchange reserves
  3. (c) Political instability causing investor flight
  4. (d) Rising unemployment and stagnation in industrial production
Answer & solution

Answer: (b) Inability to repay external debt and critical depletion of foreign exchange reserves

The correct answer is Inability to repay external debt and critical depletion of foreign exchange reserves (Option 2).
In 1991, India faced a severe balance of payments crisis. Foreign exchange reserves fell to just about two weeks' worth of imports, and India could barely service its external debt. To avert default, India pledged gold reserves to the IMF and implemented sweeping economic reforms (LPG reforms).
Option 1 - High inflation and fall in rupee value: While inflation existed, the immediate trigger of the 1991 crisis was the balance of payments problem and near-depletion of forex reserves.
Option 3 - Political instability: There was political instability in 1991, but it was not the primary economic cause of the crisis.
Option 4 - Rising unemployment and industrial stagnation: These were consequences of the economic problems rather than the primary cause of the 1991 crisis.
Delhi Police Constable (Exe) 2025-26 – 23 December 2025 Shift 3 · MSME sector

Q147. Fill in the blank: In 1950, a small-scale industrial unit in India was defined as one with a maximum investment of ________.

  1. (a) Rs 1 crore
  2. (b) Rs 5 lakh
  3. (c) Rs 50 lakh
  4. (d) Rs 10 lakh
Answer & solution

Answer: (b) Rs 5 lakh

The correct answer is Rs 5 lakh (Option 2).
In 1950, when India first formally defined small-scale industries (SSIs), a small-scale industrial unit was defined as one with a maximum investment of Rs 5 lakh in plant and machinery. This threshold was subsequently revised several times as the economy grew and costs increased.
Option 1 - Rs 1 crore: Rs 1 crore was introduced as the upper limit for SSIs in a much later period after several revisions to the original 1950 definition.
Option 3 - Rs 50 lakh: Rs 50 lakh is also a later revised limit and was not the original 1950 definition.
Option 4 - Rs 10 lakh: Rs 10 lakh is not the original 1950 threshold for SSIs in India.
Delhi Police Constable (Exe) 2025-26 – 22 December 2025 Shift 1 · MSME sector

Q148. What is meant by "Reservation for Small-Scale Sector" in the context of industrial policy before 1990?

  1. (a) Only small firms could participate in foreign trade
  2. (b) Small enterprises received tax-free status permanently
  3. (c) Certain products could only be produced by small enterprises
  4. (d) All raw materials were subsidized for small enterprises
Answer & solution

Answer: (c) Certain products could only be produced by small enterprises

In India's pre-1991 industrial policy, 'Reservation for Small-Scale Sector' meant that a list of specified products (which grew to over 800 items by the 1980s) was exclusively reserved for production by small-scale industries (SSIs). Large firms were prohibited from manufacturing these items, protecting small producers from large-scale competition. Option 3 is correct.
Option 1 is wrong: 'Reservation' did not mean only small firms could participate in foreign trade; it specifically referred to production rights — only small enterprises could manufacture certain reserved products for the domestic market.
Option 2 is wrong: The SSI reservation policy did not grant permanent tax-free status to small enterprises; while SSIs received some tax benefits and concessions, tax exemption was not the meaning of 'reservation' in industrial policy.
Option 4 is wrong: Subsidization of raw materials was a separate policy instrument; 'Reservation for Small-Scale Sector' specifically meant the exclusive right to produce certain categories of products — not raw material subsidies.
Delhi Police Constable (Exe) 2025-26 – 22 December 2025 Shift 1 · Competition Commission of India

Q149. What was the aim of introducing the Monopolies and Restrictive Trade Practices (MRTP) Act, 1969?

  1. (a) Liberalize Foreign Direct Investment limits
  2. (b) Encourage public-sector disinvestment
  3. (c) Promote private monopolies
  4. (d) Prevent concentration of economic power
Answer & solution

Answer: (d) Prevent concentration of economic power

The Monopolies and Restrictive Trade Practices (MRTP) Act, 1969, was enacted with the primary aim of preventing concentration of economic power to the common detriment, prohibiting monopolistic and restrictive trade practices, and ensuring that the operation of the economic system does not result in the concentration of wealth. Option 4 is correct.
Option 1 is wrong: Liberalizing Foreign Direct Investment limits was not the aim of the MRTP Act; FDI liberalization came much later with the 1991 economic reforms; the MRTP Act actually restricted large industrial houses.
Option 2 is wrong: Encouraging public-sector disinvestment is the opposite of the MRTP era philosophy; the 1969 period was one of greater state control and restriction of large private enterprises.
Option 3 is wrong: The MRTP Act was specifically designed to PREVENT private monopolies, not promote them; it imposed restrictions on large firms and required government approval for expansion by companies above a certain asset threshold.
Delhi Police Constable (Exe) 2025-26 – 22 December 2025 Shift 2 · LPG reforms of 1991

Q150. What term describes the removal of barriers or restrictions set by the government to promote foreign trade and investment?

  1. (a) Globalization
  2. (b) Liberalization
  3. (c) Protectionism
  4. (d) Nationalization
Answer & solution

Answer: (b) Liberalization

Liberalization refers to the process of removing or reducing government restrictions, regulations, and barriers on economic activities — particularly those related to foreign trade, investment, and business operations. In India's context, the 1991 economic reforms brought liberalization by removing import quotas, industrial licensing, and foreign exchange restrictions. Option 2 is correct.
Option 1 is wrong: Globalization refers to the broader process of increasing interconnectedness and interdependence of world economies, cultures, and populations; it is the outcome, while liberalization is the policy tool that promotes it.
Option 3 is wrong: Protectionism is the OPPOSITE of liberalization — it involves governments erecting barriers (tariffs, quotas, subsidies) to protect domestic industries from foreign competition, not removing them.
Option 4 is wrong: Nationalization refers to the transfer of private ownership of industries and assets to government (public) ownership; it represents MORE government control, not less — the opposite of liberalization.
Delhi Police Constable (Exe) 2025-26 – 22 December 2025 Shift 2 · Industrial Policy Resolutions (1948, 1956, 1991)

Q151. Which of the following was removed by the reform policies introduced after 1991 in India?

  1. (a) Control over all prices in the market
  2. (b) Industrial licensing for most sectors
  3. (c) Restrictions on foreign ownership in private firms
  4. (d) Government regulation of small-scale industries
Answer & solution

Answer: (b) Industrial licensing for most sectors

The 1991 economic reforms introduced by Finance Minister Manmohan Singh abolished industrial licensing (the ' Licence Raj') for most sectors of the Indian economy. Previously, firms needed government permission ( licences ) to start, expand, or change production. The 1991 Industrial Policy Statement removed licensing requirements for all industries except 18 specified ones. Option 2 is correct.
Option 1 is wrong: Control over all prices in the market was not fully removed by the 1991 reforms; the government retained price controls in sectors like petroleum, fertilizers, and essential commodities — it was a partial, not complete, decontrol.
Option 3 is wrong: The 1991 reforms actually RELAXED (not removed) restrictions on foreign ownership, allowing higher FDI limits in many sectors — but restrictions were not fully removed; they were reduced progressively over subsequent years.
Option 4 is wrong: Government regulation of small-scale industries was not removed by the 1991 reforms; the SSI reservation policy (reserving products exclusively for small enterprises) continued even after 1991 and was only gradually phased out from the 2000s.
Delhi Police Constable (Exe) 2025-26 – 20 December 2025 Shift 1 · Make in India, Startup India and PLI

Q152. What is the primary objective of the Make in India campaign?

  1. (a) To promote education in India
  2. (b) To enhance digital literacy
  3. (c) To boost manufacturing and encourage foreign direct investment (FDI)
  4. (d) To attract foreign tourists
Answer & solution

Answer: (c) To boost manufacturing and encourage foreign direct investment (FDI)

Make in India, launched in September 2014, has the primary objective of transforming India into a global manufacturing hub and encouraging both domestic and foreign companies to invest and manufacture in India. Option 3 is correct.
Option 1 is wrong: Promotion of education is the mandate of the National Education Policy (NEP) 2020 and schemes like Samagra Shiksha, not Make in India.
Option 2 is wrong: Digital literacy is promoted through the Digital India programme (2015), not Make in India.
Option 4 is wrong: Attracting foreign tourists is the purpose of the Incredible India campaign run by the Ministry of Tourism, not Make in India.
Delhi Police Constable (Exe) 2025-26 – 20 December 2025 Shift 1 · Infrastructure sectors

Q153. The most significant feature of the New Telecom Policy (NTP) 1999 was:

  1. (a) Introduction of revenue-sharing licensing
  2. (b) 100% Foreign Direct Investment in telecom
  3. (c) Wireless monopoly of BSNL
  4. (d) Voice over Internet Protocol
Answer & solution

Answer: (a) Introduction of revenue-sharing licensing

The most significant and defining feature of the New Telecom Policy (NTP) 1999 was the introduction of revenue-sharing licensing, which replaced the earlier fixed license fee regime that had led to financial difficulties for telecom operators and slowed sector growth. Option 1 is correct.
Option 2 is wrong: 100% FDI in telecom was not introduced by NTP 1999; FDI limits were progressively raised over the years and full FDI was permitted much later.
Option 3 is wrong: NTP 1999 actually promoted competition and did not grant any wireless monopoly to BSNL; BSNL was incorporated as a public sector company in 2000.
Option 4 is wrong: VoIP (Voice over Internet Protocol) regulation was a separate matter addressed later; it was not the defining feature of NTP 1999.
Delhi Police Constable (Exe) 2025-26 – 20 December 2025 Shift 2 · LPG reforms of 1991

Q154. What was the primary objective of the 1991 economic reforms in India?

  1. (a) To increase public sector dominance
  2. (b) To nationalize banks
  3. (c) To liberalize, privatize, and globalize the economy
  4. (d) To implement an import substitution strategy
Answer & solution

Answer: (c) To liberalize, privatize, and globalize the economy

The 1991 economic reforms (LPG reforms), introduced under Finance Minister Dr. Manmohan Singh and Prime Minister P.V. Narasimha Rao, aimed to liberalize, privatize, and globalize the Indian economy — dismantling the License Raj, opening markets to foreign investment, and integrating India into the global economy. Option 3 is correct.
Option 1 is wrong: Increasing public sector dominance was the pre-1991 policy; the 1991 reforms actually sought to reduce the public sector's role and encourage private enterprise.
Option 2 is wrong: Bank nationalization had already occurred in 1969 and 1980; the 1991 reforms moved in the opposite direction by introducing competition in banking.
Option 4 is wrong: Import substitution was the strategy followed before 1991 (building domestic industries behind protectionist barriers); the 1991 reforms replaced this with an outward-looking, export-promotion approach.
Delhi Police Constable (Exe) 2025-26 – 20 December 2025 Shift 2 · Industrial Policy Resolutions (1948, 1956, 1991)

Q155. Which industries was explicitly reserved for the public sector by the Industrial Policy Resolution of 1956?

  1. (a) Cotton textiles
  2. (b) Cement manufacturing
  3. (c) Defense and atomic energy
  4. (d) Sugar refining
Answer & solution

Answer: (c) Defense and atomic energy

The Industrial Policy Resolution (IPR) 1956 divided industries into Schedule A (exclusively reserved for the public sector), Schedule B (mixed), and Schedule C (private sector). Schedule A included defense industries, atomic energy, railway transport, air transport, iron and steel, coal, oil, and electricity generation. Defense and atomic energy were exclusively for the public sector. Option 3 is correct.
Option 1 is wrong: Cotton textiles was placed in Schedule C (private sector) under IPR 1956, as it was an established consumer goods industry suitable for private enterprise.
Option 2 is wrong: Cement manufacturing was included in Schedule C (private sector) under IPR 1956, left to private enterprise with government oversight.
Option 4 is wrong: Sugar refining was a private sector activity under IPR 1956; it was not reserved for the public sector.
Delhi Police Constable (Exe) 2025-26 – 20 December 2025 Shift 3 · Infrastructure sectors

Q156. What is the primary objective of PM Gati Shakti?

  1. (a) Facilitating integrated infrastructure planning
  2. (b) Expanding healthcare services
  3. (c) Supporting digital education
  4. (d) Promoting rural employment
Answer & solution

Answer: (a) Facilitating integrated infrastructure planning

PM Gati Shakti — National Master Plan for Multi-modal Connectivity, launched in October 2021 — is a digital platform that brings 16 Ministries together for integrated and holistic infrastructure planning. Its primary objective is facilitating seamless multi-modal connectivity across rail, road, port, air, and waterway infrastructure. Option 1 is correct.
Option 2 is wrong: Expanding healthcare services is the mandate of schemes like Ayushman Bharat and the National Health Mission; PM Gati Shakti focuses on infrastructure and logistics connectivity.
Option 3 is wrong: Supporting digital education is addressed by National Education Policy initiatives and schemes like DIKSHA and PM e-VIDYA; PM Gati Shakti addresses physical infrastructure planning.
Option 4 is wrong: Promoting rural employment is the purpose of MGNREGA (Mahatma Gandhi National Rural Employment Guarantee Act); PM Gati Shakti aims at integrated infrastructure development for economic growth.
Delhi Police Constable (Exe) 2025-26 – 19 December 2025 Shift 1 · Disinvestment

Q157. What was the aim of the Disinvestment policy post-1991?

  1. (a) Reduce fiscal burden, improve efficiency, broaden ownership
  2. (b) Stop public investment
  3. (c) Fully privatize all Public Sector Undertakings
  4. (d) Increase market concentration
Answer & solution

Answer: (a) Reduce fiscal burden, improve efficiency, broaden ownership

The post-1991 Disinvestment policy in India aimed to: (1) Reduce the fiscal burden on the government by mobilising funds from sale of PSU shares; (2) Improve efficiency of PSUs by exposing them to market discipline and competition; and (3) Broaden ownership base by selling shares to the public, workers, and financial institutions. The policy was not about complete privatisation but about partial stake sale.
Option 2 is incorrect: The disinvestment policy did not aim to stop public investment; the government continued to invest in PSUs while also divesting stakes.
Option 3 is incorrect: The aim was not to fully privatize all PSUs. The policy involved strategic disinvestment in some cases and minority stake sales in others, not blanket privatisation .
Option 4 is incorrect: Increasing market concentration is the opposite of the intended effect; disinvestment was meant to promote competition and market efficiency.
Delhi Police Constable (Exe) 2025-26 – 19 December 2025 Shift 1 · Infrastructure sectors

Q158. The New Telecom Policy 1999 introduced:

  1. (a) State monopoly in telecom
  2. (b) Nationalization of internet services
  3. (c) Ban on private operators
  4. (d) Migration to a revenue-sharing regime from a fixed license fee system
Answer & solution

Answer: (d) Migration to a revenue-sharing regime from a fixed license fee system

The National Telecom Policy (NTP) 1999 introduced the migration from a fixed license fee system to a revenue-sharing regime. Under the earlier system, telecom operators paid a one-time fixed license fee. NTP 1999 replaced this with revenue sharing, where operators paid a percentage of their Adjusted Gross Revenue (AGR) to the government. This made the telecom sector more financially viable and led to the explosive growth of Indian telecom.
Option 1 is incorrect: NTP 1999 actually ended the state monopoly in telecom by encouraging private competition; the opposite of state monopoly.
Option 2 is incorrect: NTP 1999 did not nationalise internet services; it liberalised the internet service provider (ISP) sector, allowing multiple private players.
Option 3 is incorrect: NTP 1999 did not ban private operators; it actually facilitated the entry of more private telecom companies.
Delhi Police Constable (Exe) 2025-26 – 19 December 2025 Shift 1 · Infrastructure sectors

Q159. Which of the following reforms introduced the concept of "Open Access" in electricity distribution?

  1. (a) Energy Act 1999
  2. (b) Electricity Act 2003
  3. (c) Power Trading Reform Policy 2001
  4. (d) Ujwal DISCOM Assurance Yojana
Answer & solution

Answer: (b) Electricity Act 2003

The Electricity Act 2003 introduced the concept of 'Open Access' in India's electricity sector. Under this provision, consumers (particularly large industrial and commercial users) can choose their electricity supplier and access the transmission/distribution network by paying wheeling charges. This promoted competition in the power sector by separating generation from transmission and distribution.
Option 1 is incorrect: There is no 'Energy Act 1999' in India's electricity sector reform history.
Option 3 is incorrect: There is no formal 'Power Trading Reform Policy 2001' that introduced Open Access in the electricity sector.
Option 4 is incorrect: Ujwal DISCOM Assurance Yojana (UDAY, 2015) was a scheme to improve the financial health of electricity distribution companies (DISCOMs); it did not introduce the concept of Open Access.
Delhi Police Constable (Exe) 2025-26 – 19 December 2025 Shift 2 · LPG reforms of 1991

Q160. What was the emphasis of fiscal reform under the 1991 program?

  1. (a) Nationalizing industries to increase revenue
  2. (b) Increasing government expenditure to stimulate demand
  3. (c) Reducing foreign investment dependence
  4. (d) Reducing subsidies, rationalizing expenditure, and improving tax efficiency
Answer & solution

Answer: (d) Reducing subsidies, rationalizing expenditure, and improving tax efficiency

The fiscal reform component of India's 1991 economic liberalization program (implemented under PM Narasimha Rao and Finance Minister Manmohan Singh) focused on: (1) Reducing subsidies (especially fertilizer and food subsidies); (2) Rationalizing government expenditure by cutting non-plan expenditure; and (3) Improving tax efficiency by broadening the tax base, simplifying tax structures, and reducing rates while improving compliance. This was done to reduce the fiscal deficit, which had become unsustainable.
Option 1 is incorrect: The 1991 reforms moved in the OPPOSITE direction — they promoted privatization and disinvestment of public sector units, not nationalization.
Option 2 is incorrect: The 1991 fiscal reform was about REDUCING government expenditure (to cut the deficit), not increasing it to stimulate demand — that is Keynesian fiscal stimulus, the opposite of 1991 policy.
Option 3 is incorrect: The 1991 reforms actually encouraged MORE foreign investment (FDI liberalization, opening sectors to MNCs) — not reducing foreign investment dependence.
Delhi Police Constable (Exe) 2025-26 – 18 December 2025 Shift 1 · Competition Commission of India

Q161. In 2022, Sangeeta Verma was appointed as the 'Competition Commission of India's (CCI) Chairperson.
Which of the following is correct regarding her role and responsibilities?

  1. (a) Regulating foreign trade and setting import-export duties
  2. (b) Promoting and sustaining fair competition in Indian markets
  3. (c) Drafting national education policies and curricula
  4. (d) Supervising the functioning of public sector banks
Answer & solution

Answer: (b) Promoting and sustaining fair competition in Indian markets

The Competition Commission of India (CCI) was established under the Competition Act, 2002. Its primary mandate is to promote and sustain fair competition in Indian markets, protect consumer interests, and ensure freedom of trade in the markets of India.
Option (a) is incorrect: Regulating foreign trade and setting import-export duties is the role of the Directorate General of Foreign Trade (DGFT) under the Ministry of Commerce.
Option (c) is incorrect: Drafting national education policies and curricula falls under the Ministry of Education, not CCI.
Option (d) is incorrect: Supervising public sector banks is the role of the Reserve Bank of India (RBI) and the Ministry of Finance.
Delhi Police Constable (Exe) 2025-26 – 18 December 2025 Shift 1 · Industrial Policy Resolutions (1948, 1956, 1991)

Q162. Which of the following was a key feature of the New Industrial Policy of 1991?

  1. (a) Abolition of industrial licensing for most sectors
  2. (b) Increased government control over industries
  3. (c) Ban on foreign investment
  4. (d) Nationalization of private companies
Answer & solution

Answer: (a) Abolition of industrial licensing for most sectors

The New Industrial Policy of 1991 abolished industrial licensing for most industries (except for a few sensitive areas like defence, atomic energy, hazardous chemicals). This effectively ended the 'License Raj' — the era of extensive government controls over private industries. It opened the economy to private and foreign investment, marking a shift toward liberalization.
Option (b) is incorrect: The 1991 policy actually REDUCED government control over industries, moving toward a market-oriented economy.
Option (c) is incorrect: The policy ENCOURAGED foreign direct investment (FDI), not banned it. FDI limits were relaxed significantly.
Option (d) is incorrect: The policy moved AWAY from nationalization. It was the opposite — encouraging privatization and competition.
Delhi Police Constable (Exe) 2025-26 – 18 December 2025 Shift 1 · LPG reforms of 1991

Q163. What does LPG stand for in the context of post-1991 economic reforms?

  1. (a) Liberalization, Privatization, Globalization
  2. (b) Local Production Growth
  3. (c) Limited Privatization Goals
  4. (d) Liberalization, Public Growth
Answer & solution

Answer: (a) Liberalization, Privatization, Globalization

In the context of India's 1991 New Economic Policy (NEP), LPG stands for Liberalization, Privatization, and Globalization. Liberalization involved removing government controls and regulations; Privatization involved transferring public sector enterprises to private ownership; Globalization involved integrating India's economy with the world economy through trade and investment.
Option (b) is incorrect: 'Local Production Growth' is not an economic policy term and was not part of the 1991 reforms.
Option (c) is incorrect: 'Limited Privatization Goals' is not the correct expansion of LPG in this context.
Option (d) is incorrect: 'Public Growth' is not the third component; it should be 'Globalization.'
Delhi Police Constable (Exe) 2025-26 – 18 December 2025 Shift 2 · LPG reforms of 1991

Q164. What was the aim of the reduction of customs duties in 1991?

  1. (a) Protecting domestic industries
  2. (b) Increasing revenue only
  3. (c) Promoting exports and integration with the global market
  4. (d) Encouraging import substitution
Answer & solution

Answer: (c) Promoting exports and integration with the global market

In 1991, India undertook major economic liberalisation reforms under Finance Minister Manmohan Singh. The reduction of customs duties (import tariffs) was aimed at promoting exports and integrating the Indian economy with the global market. By reducing tariffs, Indian industries were exposed to global competition, encouraging efficiency, quality improvement, and export orientation. This was part of the broader LPG ( Liberalisation , Privatisation , Globalisation ) reforms.
Option 1 is incorrect: Reducing customs duties actually reduced protection for domestic industries; protecting domestic industries was the goal of high tariffs (the pre-1991 policy of import substitution).
Option 2 is incorrect: Reducing customs duties generally reduces government revenue from customs; the goal was not just revenue generation.
Option 4 is incorrect: Import substitution was the old pre-1991 policy that relied on high tariffs and quotas to protect domestic producers; reducing duties was a move away from import substitution.
SSC CPO Paper-1 2025 – 12 December 2025 Shift 1 · LPG reforms of 1991

Q165. To assist businesses in complying with legal requirements, governments are:

  1. (a) Developing rules that are unique compared to other countries.
  2. (b) Harmonizing their laws with international standards.
  3. (c) Completely doing away with regulations.
  4. (d) Disregarding the implementation of legal rules.
Answer & solution

Answer: (b) Harmonizing their laws with international standards.

Correct Answer: Harmonizing their laws with international standards (Option 2)
To assist businesses — especially those operating across borders — governments are increasingly harmonizing their domestic laws with international standards (such as those set by WTO, ISO, Basel norms, etc.). This reduces compliance burden, improves ease of doing business, and facilitates international trade and investment.
Developing unique rules (Option 1) would increase compliance burden, not reduce it.
Completely removing regulations (Option 3) would create legal chaos and risk consumer harm.
Disregarding legal implementation (Option 4) undermines the rule of law.
SSC CPO Paper-1 2025 – 12 December 2025 Shift 2 · Make in India, Startup India and PLI

Q166. Which digital initiative improved India's Ease of Doing Business ( EoDB ) in 'Starting a Business'?

  1. (a) Digi Locker
  2. (b) Udyam Portal
  3. (c) GST Portal
  4. (d) MCA21
Answer & solution

Answer: (d) MCA21

Correct: MCA21.
MCA21 (Ministry of Corporate Affairs portal) streamlined company registration and compliance processes online, directly improving India's EoDB ranking under 'Starting a Business'. DigiLocker stores documents digitally; Udyam Portal is for MSME registration; GST Portal is for tax compliance — none are specifically linked to improving 'Starting a Business' metric.
SSC CPO Paper-1 2025 – 12 December 2025 Shift 2 · Infrastructure sectors

Q167. Consider the following:
(1) DPIIT handles industrial promotion.
(2) It implements Gati Shakti.
Which of the above statements is/are correct?

  1. (a) Only 1
  2. (b) Only 2
  3. (c) Both 1 and 2
  4. (d) Neither 1 nor 2
Answer & solution

Answer: (c) Both 1 and 2

Correct: Both 1 and 2.
DPIIT (Department for Promotion of Industry and Internal Trade) under the Ministry of Commerce and Industry:
Statement 1: CORRECT — DPIIT is the nodal agency for industrial promotion policy in India.
Statement 2: CORRECT — DPIIT is the implementing agency for PM Gati Shakti National Master Plan, the multimodal connectivity initiative.
Note: This question was Not Answered by the candidate.
SSC CPO Paper-1 2025 – 11 December 2025 Shift 2 · Infrastructure sectors

Q168. Under PM Gati Shakti, who is responsible for nodal planning?

  1. (a) MoF
  2. (b) DPIIT
  3. (c) MHA
  4. (d) TRAI
Answer & solution

Answer: (b) DPIIT

Correct Answer: DPIIT (Option 2)
Under the PM Gati Shakti National Master Plan, the Department for Promotion of Industry and Internal Trade (DPIIT) under the Ministry of Commerce and Industry is the nodal department responsible for overall planning, coordination, and implementation. DPIIT maintains the integrated digital platform (GIS-based master plan) that maps all infrastructure projects across ministries.
MoF (Ministry of Finance) handles fiscal matters but is not the nodal department for PM Gati Shakti.
MHA (Ministry of Home Affairs) handles internal security and state relations — not infrastructure planning.
TRAI (Telecom Regulatory Authority of India) regulates telecom services — unrelated to PM Gati Shakti planning.
SSC CPO Paper-1 2025 – 11 December 2025 Shift 2 · Classification of industries (size, ownership, raw material)

Q169. Which of the following is correctly classified as a basic industry?

  1. (a) Sugar
  2. (b) Fans
  3. (c) Sewing machines
  4. (d) Aluminium smelting
Answer & solution

Answer: (d) Aluminium smelting

Correct Answer: Aluminium smelting (Option 4)
Basic industries (also called heavy or key industries) produce raw materials or semi-finished goods used by other industries. Aluminium smelting is a basic industry as it produces aluminium metal used in aerospace, construction, electrical, and manufacturing sectors.
Sugar is a consumer/agro-based industry — it produces a final consumer product, not raw material for other industries.
Fans are a consumer durable goods industry — these are final products.
Sewing machines are consumer goods/light engineering products — not basic industry inputs.
Basic industries include iron & steel, aluminium smelting, heavy chemicals, cement — industries that form the backbone of industrial production.
SSC CPO Paper-1 2025 – 11 December 2025 Shift 2 · MSME sector

Q170. Read the following Assertion and Reason (R) carefully and choose the correct option.
Assertion (A): The Karve Committee (1955) supported rural industrialisation.
Reason (R): It focused on large-scale capital-intensive manufacturing in urban centres.

  1. (a) Both A and R are true and R is the correct explanation of A.
  2. (b) Both A and R are true but R is not the correct explanation of A.
  3. (c) A is true but R is false.
  4. (d) A is false but R is true.
Answer & solution

Answer: (c) A is true but R is false.

Correct Answer: A is true but R is false (Option 3)
Assertion is TRUE: The Karve Committee (Village and Small-Scale Industries Committee, 1955), chaired by D.G. Karve, supported rural and cottage industrialization. It recommended development of small-scale and village industries to generate rural employment and prevent excessive urban migration.
Reason (R) is FALSE: The Karve Committee did NOT focus on large-scale capital-intensive manufacturing in urban centres. It actually recommended the opposite — small-scale, labour-intensive industries suited to rural and semi-urban areas. Large-scale capital-intensive urban manufacturing was more aligned with Nehru's Industrial Policy and heavy industry planning, not the Karve Committee's recommendations.
Therefore, A is true but R is false — Option 3.
SSC CPO Paper-1 2025 – 11 December 2025 Shift 2 · Infrastructure sectors

Q171. Consider the following statements regarding the National Electricity Plan 2023:
1. It projects over 50% installed power capacity from non-fossil sources by 2030.
2. It proposes nationwide shutdown of thermal plants older than 25 years.
Which of the following is/are Correct?

  1. (a) Only 1
  2. (b) Only 2
  3. (c) 1 and 2
  4. (d) Neither 1 nor 2
Answer & solution

Answer: (a) Only 1

Correct Answer: Only 1 (Option 1)
Statement 1 is CORRECT: The National Electricity Plan (NEP) 2023 projects that over 50% of India's total installed power capacity will come from non-fossil fuel sources (renewable energy like solar, wind, hydro, nuclear) by 2030, aligning with India's commitments under the Paris Agreement and NDCs.
Statement 2 is INCORRECT: The NEP 2023 does NOT propose a nationwide shutdown of thermal plants older than 25 years. While it acknowledges the need to retire old, inefficient plants, there is no blanket proposal to shut down all thermal plants above 25 years. India still depends heavily on thermal power (coal) for base load, and an immediate/sweeping shutdown would be impractical.
Therefore, only Statement 1 is correct.
SSC CPO Paper-1 2025 – 10 December 2025 Shift 1 · Classification of industries (size, ownership, raw material)

Q172. Which of the following pairs correctly represent light industries?

  1. (a) Oil and Shipbuilding
  2. (b) Knitting needles and Electric bulbs
  3. (c) Automobile and Brassware
  4. (d) Sewing machines and Shipbuilding
Answer & solution

Answer: (b) Knitting needles and Electric bulbs

Correct Answer: Knitting needles and Electric bulbs
Light industries are those that use lighter raw materials, produce consumer goods, and have lower capital requirements. Knitting needles and electric bulbs are classic examples of light industries.
Option 1 (Oil and Shipbuilding): Incorrect. Both are heavy industries.
Option 3 (Automobile and Brassware): Incorrect. Automobile manufacturing is a heavy/medium industry.
Option 4 (Sewing machines and Shipbuilding): Incorrect. Shipbuilding is a heavy industry.
SSC CPO Paper-1 2025 – 10 December 2025 Shift 1 · LPG reforms of 1991

Q173. Which of the following was not a goal of 1991 economic reforms?

  1. (a) Promote industrial competitiveness
  2. (b) Expand public sector control
  3. (c) Boost foreign investment
  4. (d) Achieve fiscal discipline
Answer & solution

Answer: (b) Expand public sector control

Correct Answer: Expand public sector control
The 1991 economic reforms (New Economic Policy) under PM Narasimha Rao and Finance Minister Manmohan Singh were based on the LPG model — Liberalisation, Privatisation, and Globalisation. The goals were to promote industrial competitiveness, boost foreign investment, achieve fiscal discipline, reduce trade barriers, and reduce public sector dominance.
Expanding public sector control was the OPPOSITE of 1991 reforms — the reforms aimed to REDUCE public sector monopoly and open the economy to private and foreign players.
Therefore, 'Expand public sector control' was NOT a goal of 1991 reforms.
SSC CPO Paper-1 2025 – 10 December 2025 Shift 2 · LPG reforms of 1991

Q174. Governments are trying to make rules for businesses simpler and easier to understand.
This approach is known as:

  1. (a) Making rules harder
  2. (b) Streamlining regulations
  3. (c) Ignoring rules
  4. (d) Creating more rules
Answer & solution

Answer: (b) Streamlining regulations

Correct Answer: Streamlining regulations
Streamlining regulations means simplifying and rationalising existing rules to make them clearer, fewer, and easier to comply with. This reduces the compliance burden on businesses and is a key goal of Ease of Doing Business reforms.
Option 1: Incorrect. Making rules harder is the opposite.
Option 3: Incorrect. Ignoring rules would be unlawful.
Option 4: Incorrect. Creating more rules adds complexity.
SSC CPO Paper-1 2025 – 10 December 2025 Shift 2 · Classification of industries (size, ownership, raw material)

Q175. Based on the classification of industries by raw material source, which option below is correctly paired?

  1. (a) Tea – Mineral-based industry
  2. (b) Petrochemicals – Mineral-based industry
  3. (c) Coffee – Mineral-based industry
  4. (d) Woollen textile – Mineral-based industry
Answer & solution

Answer: (b) Petrochemicals – Mineral-based industry

Correct Answer: Petrochemicals – Mineral-based industry
Industries are classified by raw material source as: Agro -based (raw material from agriculture — cotton, jute, sugar, tea, coffee), Forest-based (timber, paper), Mineral-based (iron/steel, cement, petrochemicals), and Animal-based (leather, wool, dairy).
Petrochemicals are derived from petroleum (crude oil) — a mineral resource. So, petrochemicals is correctly classified as a mineral-based industry.
Option 1 (Tea): Incorrect. Tea is an agro -based industry.
Option 3 (Coffee): Incorrect. Coffee is an agro -based industry.
Option 4 (Woollen textile): Incorrect. Wool comes from animals — it is an animal-based industry.
SSC CPO Paper-1 2025 – 10 December 2025 Shift 2 · LPG reforms of 1991

Q176. Read the following statements carefully and choose the correct option regarding Assertion (A) and Reason (R).
Assertion (A): Tax reforms post-1991 included lowering income tax rates.
Reason (R): Lower tax rates were believed to increase tax compliance and reduce evasion.

  1. (a) Both A and R are true and R is the correct explanation of A.
  2. (b) Both A and R are true but R is not the correct explanation of A.
  3. (c) A is true but R is false.
  4. (d) A is false but R is true.
Answer & solution

Answer: (a) Both A and R are true and R is the correct explanation of A.

Correct Answer: Both A and R are true and R is the correct explanation of A.
Assertion (A) is TRUE: Post-1991 tax reforms under the guidance of the Tax Reforms Committee (Chellaiah Committee) included rationalisation and reduction of income tax rates to broaden the tax base.
Reason (R) is TRUE: The rationale was based on the Laffer Curve principle — lower tax rates reduce the incentive to evade taxes, increase compliance, and ultimately can lead to higher tax revenues. R directly and correctly explains why taxes were lowered (A).
Therefore, both A and R are true and R is the correct explanation of A.
SSC CPO Paper-1 2025 – 9 December 2025 Shift 1 · MSME sector

Q177. Which of the following statements regarding the classification of small-scale industries in India is CORRECT?

  1. (a) They are classified based on the number of workers employed.
  2. (b) They are identified by annual turnover only.
  3. (c) They are classified based on capital investment in assets.
  4. (d) They are defined solely by export volume.
Answer & solution

Answer: (c) They are classified based on capital investment in assets.

Historically, and for the purpose of SSC/government exam classification, small-scale industries (SSIs) in India are identified based on capital investment in plant and machinery.
Under the revised MSME classification (2020), both investment in plant & machinery AND annual turnover are used as dual criteria.
However, the primary and traditional criterion for SSI classification remains capital investment in plant and machinery/assets.
Option A (number of workers): Not the classification criterion in India's MSME/SSI framework.
Option B (annual turnover only): Turnover alone is not the sole criterion.
Option D (export volume): Not used as a classification basis for SSIs in India.
SSC CPO Paper-1 2025 – 9 December 2025 Shift 2 · Classification of industries (size, ownership, raw material)

Q178. Which of the following statements about public sector industries is correct?

  1. (a) They are owned by private individuals.
  2. (b) They operate without government regulation.
  3. (c) They are owned and operated by government agencies.
  4. (d) They are only run in rural areas.
Answer & solution

Answer: (c) They are owned and operated by government agencies.

Correct Answer: They are owned and operated by government agencies.
Public sector industries (also called Public Sector Undertakings — PSUs) are enterprises that are owned, managed, and controlled by the government (central or state). Examples include ONGC, BHEL, SAIL, Coal India, etc. The government has a majority shareholding and administrative control.
Option 1: Incorrect. Private ownership defines private sector, not public sector.
Option 2: Incorrect. PSUs are actually MORE regulated, not less.
Option 4: Incorrect. PSUs operate in urban, semi-urban, and rural areas alike.
SSC Stenographer 2025 – 8 December 2025 Shift 1 · Infrastructure sectors

Q179. Which of the following is a key focus area of the PM Gati Shakti National Master Plan?

  1. (a) Agricultural subsidies
  2. (b) Urban development
  3. (c) Rural electrification
  4. (d) Multi-modal connectivity
Answer & solution

Answer: (d) Multi-modal connectivity

The PM Gati Shakti National Master Plan, launched in 2021, focuses primarily on developing integrated infrastructure through multi-modal connectivity . Its aim is to bring together 16 ministries, including railways, roadways, ports, aviation, and power, on a single platform to ensure coordinated planning and faster execution of infrastructure projects. This plan intends to reduce logistics costs, improve efficiency, and boost economic growth by creating a seamless transport network.
SSC Stenographer 2025 – 8 December 2025 Shift 1 · Disinvestment

Q180. Which key reform in 1991 specifically addressed the inefficiency of public sector enterprises and promoted competition in industrial production?

  1. (a) Fiscal Responsibility Act
  2. (b) Complex Industrial Licensing process
  3. (c) Public Distribution System Reform
  4. (d) Privatization of profit-making PSUs
Answer & solution

Answer: (d) Privatization of profit-making PSUs

In 1991, India launched a major economic reform programme under Prime Minister P.V. Narasimha Rao and Finance Minister Dr. Manmohan Singh. A significant part of this reform was the liberalization, privatization, and globalization (LPG) policy . To address inefficiency in PSUs, the government introduced privatization measures by reducing government control over profit-making PSUs and allowing private investment. This improved productivity, reduced political interference, and promoted competition in industrial production. It marked a shift from a state-controlled to a market-oriented economy.
SSC Stenographer 2025 – 8 December 2025 Shift 1 · Industrial Policy Resolutions (1948, 1956, 1991)

Q181. The Industrial Policy Resolution 1956 played a significant role in shaping India’s industrial development strategy. What was a key feature of this resolution?

  1. (a) It strongly advocated for the dominance of the private sector in all industrial activities.
  2. (b) It promoted a completely open and competitive industrial environment with minimal government intervention.
  3. (c) It emphasized the development of small-scale and cottage industries while discouraging large-scale enterprises.
  4. (d) It categorized industries into three schedules, with the public sector leading in strategic and heavy industries.
Answer & solution

Answer: (d) It categorized industries into three schedules, with the public sector leading in strategic and heavy industries.

The Industrial Policy Resolution of 1956 was a landmark in India’s industrial planning. It categorized industries into three schedules : ( i ) industries under the exclusive responsibility of the state (e.g., arms, atomic energy, railways), (ii) industries where both the state and private sector could operate, but the state had a dominant role (e.g., steel, coal, aircraft), and (iii) industries left to the private sector, though subject to regulation. This framework laid the foundation of India’s mixed economy , with the public sector given primacy in heavy and strategic industries, while still allowing private enterprise in other sectors.
SSC Stenographer 2025 – 8 December 2025 Shift 2 · Make in India, Startup India and PLI

Q182. Which of the following statements are correct about the PM MITRA Scheme?1. It aims to establish integrated large-scale textile parks.2. It is implemented by the Ministry of Textiles.3. The scheme promotes synergy among textile value chain segments.

  1. (a) Only 1 and 3 are correct
  2. (b) Only 2 and 3 are correct
  3. (c) All 1, 2 and 3 are correct
  4. (d) Only 1 and 2 are correct
Answer & solution

Answer: (c) All 1, 2 and 3 are correct

The correct answer is All 1, 2 and 3 are correct . The PM MITRA (Mega Integrated Textile Region and Apparel) Scheme was launched by the Government of India to strengthen the textile sector by creating world-class industrial parks with state-of-the-art infrastructure. It aims to establish integrated large-scale textile parks that bring together spinning, weaving, processing, dyeing, printing, and garment manufacturing at one location. The scheme is implemented by the Ministry of Textiles and focuses on promoting synergy among different segments of the textile value chain , reducing logistics cost, and improving competitiveness.
SSC Stenographer 2025 – 8 December 2025 Shift 3 · LPG reforms of 1991

Q183. Read the following statements about Trade Policy Reform:
Statement I: Trade policy reform in India involved removing quantitative restrictions on imports and exports.
Statement II: Trade policy reform increased import licensing to support domestic manufacturers.

  1. (a) Only Statement I is correct
  2. (b) Both Statements I and II are correct
  3. (c) Both Statements I and II are incorrect
  4. (d) Only Statement II is correct
Answer & solution

Answer: (a) Only Statement I is correct

Trade Policy Reforms in India, particularly after 1991, aimed at liberalisation of trade . The reforms removed many quantitative restrictions (like quotas) on imports and exports to promote global integration. However, import licensing was reduced , not increased. Hence, Statement I is correct and Statement II is incorrect .
SSC Stenographer 2025 – 8 December 2025 Shift 3 · Public sector undertakings (Maharatna, Navratna, Miniratna)

Q184. Consider the emphasis placed on the public sector in India’s industrial development strategy between 1947 and 1990. What was a key rationale behind giving the public sector a dominant role during this period?

  1. (a) The private sector had sufficient capital and technological expertise to drive industrialization in all key sectors.
  2. (b) There was a lack of demand for industrial goods in the domestic market, necessitating government intervention.
  3. (c) The public sector was seen as a tool for achieving social goals, promoting balanced regional development, and controlling strategic industries.
  4. (d) Public sector industries were inherently more efficient than private sector ones.
Answer & solution

Answer: (c) The public sector was seen as a tool for achieving social goals, promoting balanced regional development, and controlling strategic industries.

After independence, India lacked adequate private capital, infrastructure, and technical expertise to drive large-scale industrialisation . Hence, the government adopted a public sector-led strategy . Public enterprises were expected to play a key role in controlling the commanding heights of the economy —like steel, energy, heavy machinery, and defence . They were also seen as instruments to achieve social justice , reduce regional disparities, and ensure employment generation. Thus, the rationale was not about efficiency but about strategic control and social objectives . Options 1 and 4 are incorrect because private capital was insufficient, and efficiency was not the main justification. Option 2 is partly true but not the main reason. Therefore, the correct answer is Option 3 .
SSC Stenographer 2025 – 7 December 2025 Shift 2 · Industrial Policy Resolutions (1948, 1956, 1991)

Q185. Consider the following statements:
Statement I: The Industrial Policy Resolution of 1956 aimed to promote private sector dominance in all key industries.
Statement II: The Industrial Policy Resolution 1956 classified industries into three categories: fully government-owned, mixed sector with government lead, and private sector.
Which of the above statements is/are correct?

  1. (a) Statement I is correct, Statement II is incorrect
  2. (b) Statement I is incorrect, Statement II is correct
  3. (c) Both statements I and II are incorrect
  4. (d) Both statements I and II are correct
Answer & solution

Answer: (b) Statement I is incorrect, Statement II is correct

Statement I is incorrect because the Industrial Policy Resolution of 1956 was not about private sector dominance; instead, it emphasised the expansion of the public sector in strategic industries. Statement II is correct as the resolution classified industries into three categories: ( i ) Schedule A – exclusive responsibility of the State, (ii) Schedule B – progressively State-owned but with private participation, (iii) Schedule C – private sector with government regulation.
SSC Stenographer 2025 – 7 December 2025 Shift 3 · LPG reforms of 1991

Q186. How did India’s trade policy reforms post-1991 impact the import of capital goods?

  1. (a) Linked capital imports only to foreign companies
  2. (b) Imposed import quotas on machinery
  3. (c) Banned all capital imports
  4. (d) Reduced tariffs and removed licensing
Answer & solution

Answer: (d) Reduced tariffs and removed licensing

The correct answer is option 4. After the 1991 economic reforms, India liberalized its trade policy to promote globalization and industrial growth. The import of capital goods was made easier by reducing import tariffs and removing import licensing requirements . Earlier, capital goods imports were restricted by high tariffs, quotas, and licensing controls, which increased production costs. The reforms created an open environment where firms could access modern machinery and technology from abroad at lower costs. This policy shift helped enhance industrial productivity, competitiveness, and integration of the Indian economy with the global market.
SSC Stenographer 2025 – 6 December 2025 Shift 1 · LPG reforms of 1991

Q187. In which year were the major economic reforms introduced in India?

  1. (a) 1985
  2. (b) 2000
  3. (c) 1991
  4. (d) 1990
Answer & solution

Answer: (c) 1991

The correct answer is 1991 . India faced a severe economic crisis in 1991, with foreign exchange reserves barely enough to cover a few weeks of imports. To tackle this, the Government of India under Prime Minister P. V. Narasimha Rao and Finance Minister Dr. Manmohan Singh introduced a series of major economic reforms. These reforms are known as the Liberalisation , Privatisation , and Globalisation (LPG) reforms . The reforms included measures like devaluation of the rupee, reduction in import tariffs, ending the Licence Raj, encouraging foreign direct investment (FDI), and liberalising industrial policies. This marked a turning point in India’s economy, shifting from a closed, centrally planned system to a market-oriented, globally integrated economy. These reforms not only stabilized India’s economic situation but also laid the foundation for rapid growth in the following decades, transforming India into one of the world’s fastest-growing economies.
SSC Stenographer 2025 – 6 December 2025 Shift 1 · LPG reforms of 1991

Q188. Which of the following is a key reason for the decline in the agricultural sector in India after 1991 economic reforms?

  1. (a) Rising minimum support prices for all crops
  2. (b) Greater protection through higher import duties
  3. (c) Shift toward export-oriented cash crops and reduced public investment
  4. (d) Increased investment in irrigation and rural infrastructure
Answer & solution

Answer: (c) Shift toward export-oriented cash crops and reduced public investment

The correct answer is Shift toward export-oriented cash crops and reduced public investment . After the 1991 economic reforms, India adopted a policy of liberalisation , privatisation , and globalisation . This led to an agricultural shift towards cash crops for export , such as cotton, sugarcane, and oilseeds, rather than traditional food crops. At the same time, the government reduced subsidies and public investment in key areas like irrigation, rural infrastructure, and agricultural research. These changes made farmers more vulnerable to international price fluctuations and reduced overall productivity growth in agriculture.
SSC Stenographer 2025 – 6 December 2025 Shift 2 · Public sector undertakings (Maharatna, Navratna, Miniratna)

Q189. Which of the following is not a Maharatna company as of 2024?

  1. (a) Steel Authority of India Limited
  2. (b) Oil & Natural Gas Corporation Limited
  3. (c) Hindustan Copper Limited
  4. (d) National Thermal Power Corporation Limited
Answer & solution

Answer: (c) Hindustan Copper Limited

The correct answer is Hindustan Copper Limited (HCL) . In India, Public Sector Enterprises (PSEs) are classified into Maharatna , Navratna , and Miniratna categories based on their performance, turnover, and global presence. As of 2024, there are 13 Maharatna companies , including Steel Authority of India Limited (SAIL), Oil & Natural Gas Corporation (ONGC), and National Thermal Power Corporation (NTPC) . These companies enjoy greater financial and operational autonomy to compete globally. However, Hindustan Copper Limited (HCL) is categorized as a Mini Ratna Category-I company , not a Maharatna . This makes it the correct answer.
SSC Stenographer 2025 – 6 December 2025 Shift 3 · Industrial Policy Resolutions (1948, 1956, 1991)

Q190. The Industrial Policy Resolution of 1948 aimed at:

  1. (a) Developing rural areas
  2. (b) Promoting public sector
  3. (c) Opening up foreign trade
  4. (d) Privatizing industries
Answer & solution

Answer: (b) Promoting public sector

The correct answer is Promoting public sector . The Industrial Policy Resolution of 1948 was India’s first major industrial policy after independence , laying the foundation for planned economic development. It emphasized the importance of the public sector in driving industrial growth and assigned strategic industries like arms, atomic energy, railways, and heavy machinery to government ownership and control. It divided industries into four broad categories—(1) those exclusively under the state, (2) those where the state would play a dominant role, (3) those left to private initiative but under regulation, and (4) small and cottage industries. This policy marked the beginning of India’s mixed economy model , where both public and private sectors coexisted, but with the public sector playing the leading role. The aim was not privatization or foreign trade expansion, but to build a self-reliant industrial base through state intervention .
SSC Stenographer 2025 – 6 December 2025 Shift 3 · Make in India, Startup India and PLI

Q191. The PM-MITRA scheme is focused on which of the following objectives ?

  1. (a) Creating rail-based infrastructure hubs-
  2. (b) Enhancing textile exports and setting up large textile parks
  3. (c) Providing smart classrooms in rural schools
  4. (d) Expanding petroleum retail chains
Answer & solution

Answer: (b) Enhancing textile exports and setting up large textile parks

The PM-MITRA (Prime Minister Mega Integrated Textile Region and Apparel) scheme is aimed at enhancing India’s textile sector by setting up large textile parks across the country. These parks integrate the complete textile value chain from fibre to final product, boosting textile exports, generating large-scale employment, and making India globally competitive in textiles.
SSC Stenographer 2025 – 6 December 2025 Shift 3 · LPG reforms of 1991

Q192. How did Second Generation Reforms impact foreign investment in India?

  1. (a) It reduced foreign investment
  2. (b) It increased foreign investment by improving the investment climate
  3. (c) It restricted foreign companies from entering India
  4. (d) It had no impact on foreign investment
Answer & solution

Answer: (b) It increased foreign investment by improving the investment climate

Second Generation Reforms, introduced in the 1990s and early 2000s, aimed at liberalising the Indian economy further after the First Generation Reforms of 1991. These included reforms in areas such as banking, insurance, telecom, capital markets, taxation, and infrastructure. By improving transparency, simplifying procedures, and ensuring a more investor-friendly climate, these reforms encouraged greater foreign direct investment (FDI). As a result, India witnessed significant inflows of foreign capital, which supported industrial growth and economic development. Hence, the correct answer is Option 2.
SSC CHSL Tier-1 2025 – 30 November 2025 Shift 1 · LPG reforms of 1991

Q193. The India met with an economic crisis in 1991 relating to _____.

  1. (a) its external debt
  2. (b) its internal debt
  3. (c) trade embargo from western countries
  4. (d) shortfall in agriculture output due to severe drought
Answer & solution

Answer: (a) its external debt

Correct Answer: Option 1 – its external debt
India's 1991 economic crisis was primarily a Balance of Payments ( BoP ) crisis caused by excessive external debt and a severe shortage of foreign exchange reserves (down to only 2 weeks' worth of imports). India had to pledge its gold reserves to the IMF and was on the verge of defaulting on external obligations. This crisis led to the historic economic liberalisation reforms of 1991.
Why other options are wrong:
Option 2 (internal debt): While internal debt was also a concern, the immediate trigger was the external debt/ BoP crisis.
Option 3 (trade embargo): No western trade embargo was imposed on India in 1991.
Option 4 (agricultural shortfall): Agricultural shortfall was not the cause of the 1991 crisis. The candidate incorrectly selected this.
SSC CHSL Tier-1 2025 – 30 November 2025 Shift 3 · LPG reforms of 1991

Q194. Why is the low level of foreign exchange reserves a critical problem for India?

  1. (a) It means India is a lucrative place for investment.
  2. (b) It means India couldn't print money in future.
  3. (c) It means foreign citizens couldn't travel abroad.
  4. (d) It means India could barely afford to pay for essential imports for a very short time.
Answer & solution

Answer: (d) It means India could barely afford to pay for essential imports for a very short time.

Correct Answer: Option 4 – It means India could barely afford to pay for essential imports for a very short time.
Foreign exchange reserves are used to pay for essential imports (oil, machinery, medicines, etc.). When reserves fall critically low, India's import-paying capacity collapses — as seen during the 1991 BoP crisis when India had foreign exchange for less than 2 weeks of imports. This creates an economic emergency.
Why other options are wrong:
Option 1: Low forex reserves mean investors are pulling out, not that India is lucrative for investment.
Option 2: India can print its own currency (Rupees) regardless of forex reserves; the two are different.
Option 3: Foreign citizens' travel abroad is not directly impacted by India's forex reserve levels.
SSC CHSL Tier-1 2025 – 30 November 2025 Shift 3 · Industrial Policy Resolutions (1948, 1956, 1991)

Q195. Which of the following was the focus of the Industrial Policy Statement, 1991?
I. Allowing foreign investment by lowering controls and regulations
II. Exit policy for the sick units in private sector for a smooth exit without affecting welfare of labour

  1. (a) Only I
  2. (b) Only II
  3. (c) Both I and II
  4. (d) Neither I nor II
Answer & solution

Answer: (c) Both I and II

Correct Answer: Option 3 – Both I and II
The Industrial Policy Statement of 1991 focused on both areas:
I. Liberalising foreign investment: FDI was allowed in many sectors; automatic approval was permitted up to 51% equity in priority sectors.
II. Exit policy for sick units: The policy addressed the need for a smooth exit mechanism for loss-making private units without harming labour welfare.
Both were key elements of the 1991 LPG ( Liberalisation , Privatisation , Globalisation ) reforms.
Why other options are wrong:
Option 1 (Only I): Exit policy (II) was also a stated focus of the 1991 Industrial Policy.
Option 2 (Only II): Foreign investment liberalisation (I) was equally central.
Option 4 (Neither I nor II): Both were explicitly part of the 1991 policy statement.
SSC CHSL Tier-1 2025 – 29 November 2025 Shift 2 · LPG reforms of 1991

Q196. Which of the following was the aim of Liberalisation under New Economic Policy 1991 of India?

  1. (a) To put embargo on enemy countries trade
  2. (b) To increase restrictions on economic activities
  3. (c) To open various sector of the economy
  4. (d) To increase non-tariff barrier on Imports
Answer & solution

Answer: (c) To open various sector of the economy

The primary aim of Liberalisation under the New Economic Policy (NEP) 1991 was to open various sectors of the economy to private and foreign investment. It involved dismantling the Licence Raj, reducing government controls, and allowing free market forces to operate. Key measures included abolishing industrial licensing for most industries, allowing foreign direct investment, and reducing tariffs.
Putting embargo on trade, increasing restrictions, and raising non-tariff barriers are protectionist measures, which are contrary to the objectives of liberalisation .
SSC CHSL Tier-1 2025 – 29 November 2025 Shift 3 · Public sector undertakings (Maharatna, Navratna, Miniratna)

Q197. The Government introduced the ' Navratna ' scheme in _____ to identify and support CPSEs with competitive advantages in their journey to becoming global leaders.

  1. (a) 2001
  2. (b) 1993
  3. (c) 1999
  4. (d) 1997
Answer & solution

Answer: (d) 1997

Correct Answer: Option 4 – 1997
The Navratna scheme was introduced by the Government of India in 1997 to identify Central Public Sector Enterprises (CPSEs) with strong competitive advantages and grant them greater financial and operational autonomy. The initial nine Navratna companies (hence the name) were given enhanced powers to invest and expand globally.
Why other options are wrong:
Option 1 (2001): Incorrect; the scheme was introduced four years earlier, in 1997.
Option 2 (1993): 1993 was when the Maharatna / Navratna concept was being discussed; formal classification came in 1997.
Option 3 (1999): Incorrect year; 1997 is the correct year of introduction.
SSC CHSL Tier-1 2025 – 28 November 2025 Shift 3 · Industrial Policy Resolutions (1948, 1956, 1991)

Q198. Which of the following was the focus of the Industrial Policy Statement, 1977?
I. Decentralisation of industries
II. Priority to small scale Industries

  1. (a) Only I
  2. (b) Only II
  3. (c) Both I and II
  4. (d) Neither I nor II
Answer & solution

Answer: (c) Both I and II

The Industrial Policy Statement of 1977, announced by the Janata Party government, focused on both:
Statement I: Decentralisation of industries - promoting dispersal of industrial units away from urban centres to rural and semi-urban areas.
Statement II: Priority to small scale industries - giving primacy to cottage, village, and small-scale industries to generate employment and promote balanced regional development.
Hence, Both I and II is the correct answer.
SSC CHSL Tier-1 2025 – 28 November 2025 Shift 1 · LPG reforms of 1991

Q199. When a company hires regular service from external sources which was previously provided internally is known as _____.

  1. (a) Outsourcing
  2. (b) Subsidization
  3. (c) Cross-Subsidization
  4. (d) Globalisation
Answer & solution

Answer: (a) Outsourcing

Outsourcing refers to the business practice of hiring an external party to perform services or create goods that were previously performed in-house by the company itself. Companies outsource to reduce costs, access specialised skills, and improve efficiency.
Subsidization is government financial support; Cross-Subsidization is using profits from one product to subsidise another; Globalisation is the integration of world economies. Hence, Outsourcing is correct.
SSC CHSL Tier-1 2025 – 28 November 2025 Shift 1 · MSME sector

Q200. The 1997 _____ Committee Report on Small Enterprises provided the intellectual foundation as well as a practical roadmap for this important reform.

  1. (a) P. L. Tandon
  2. (b) K. L. Rekhi
  3. (c) Abhijit Sen
  4. (d) Abid Hussain
Answer & solution

Answer: (d) Abid Hussain

The 1997 Abid Hussain Committee Report on Small Enterprises provided the intellectual foundation and practical roadmap for reforms in India's small and medium enterprise (MSME) sector. The committee, chaired by Abid Hussain (former Ambassador to the USA), recommended significant liberalisation and support measures for small businesses.
P. L. Tandon is associated with banking committees; K. L. Rekhi with tax reforms; Abhijit Sen with agricultural planning. Hence, Abid Hussain is correct.
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