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Quick recap: Industry and infrastructure on one page

ಕನ್ನಡದಲ್ಲಿ ವಿವರಣೆ

Industry and infrastructure · Quick recap · Fact-checked on · how we check

Written with AI from the sources listed at the bottom of this page, then fact-checked by a separate AI.

All three parts of Industry and infrastructure condensed for quick revision: industrial policy from the 1948 and 1956 resolutions to the 1991 reforms, competition law, public enterprises and disinvestment; the IIP and core index, MSMEs, Make in India, PLI, SEZs and corridors; infrastructure, PPP models, viability gap funding, the national pipelines and long-term finance.

Each idea is explained first in Kannada (ಕನ್ನಡ), ending with the English and Hindi exam terms, followed by the same point in exam English. UPSC Prelims is in English or Hindi, so understand it in Kannada and revise it in English.

ಈ ಅಧ್ಯಾಯ ಒಂದೇ ಪಯಣ: ಸರ್ಕಾರ 'ಅನುಮತಿ ಕೊಡುವ, ತಾನೇ ನಡೆಸುವ' ಪಾತ್ರದಿಂದ (ಭಾಗ 1) 'ಅಳೆಯುವ, ಪ್ರೋತ್ಸಾಹಿಸುವ' ಪಾತ್ರಕ್ಕೆ (ಭಾಗ 2), ನಂತರ ರಸ್ತೆ, ವಿದ್ಯುತ್ ಕಟ್ಟುವಲ್ಲಿ ಖಾಸಗಿಯವರೊಂದಿಗೆ ಹೊರೆ ಹಂಚಿಕೊಳ್ಳುವ ಪಾತ್ರಕ್ಕೆ (ಭಾಗ 3). ಇಲ್ಲಿ ಮೂರೂ ಒಂದೇ ಪುಟದಲ್ಲಿ. (→ English: Industry and infrastructure · हिन्दी: उद्योग और अवसंरचना)

In exam EnglishThis chapter followed the changing role of the state in making things and in building what production depends on. Part 1 traced industrial policy from licensing to the 1991 reforms; Part 2 looked at how industry is measured and encouraged today; Part 3 turned to infrastructure and how it is paid for. The thread through all three is a state that moved from owning and permitting to regulating, offering incentives and sharing risk with private firms.
Industry and infrastructure at a glance
PartMain laws, bodies and schemesKey dates and numbers
1. Industrial policy and the 1991 reformsIPR 1948 and 1956, IDRA 1951, MRTP 1969, FERA 1973, Competition Act 2002, CPSE grades, DIPAMSchedule A 17, B 12; 24 July 1991: licensing for 18, reservation 17 to 8 (now 2); MRTP repealed 2009; Maharatna 2009; Air India 2022
2. Industry todayIIP (NSO), core index (OEA, DPIIT), MSMED Act 2006, Udyam, CGTMSE, TReDS, Make in India, PLI, SEZ Act 2005, NICDC, Startup IndiaBase 2022-23; nine core industries, 32.88% of IIP; composite MSME test from 1 July 2020; Make in India 25 Sept 2014; PLI about Rs 1.97 lakh crore
3. Infrastructure and its financingEPC, BOT, BOOT, HAM, TOT, VGF, NIP, PM Gati Shakti, NIIF, NaBFID, InvITs, REITs, National Monetisation PipelineHAM 40:60 (2016); VGF 20 + 20 (2006); NIP about Rs 111 lakh crore; NaBFID 2021; NMP about Rs 6 lakh crore (2021)

1948, 1956ರಲ್ಲಿ ಸರ್ಕಾರ ದೊಡ್ಡ ಕೈಗಾರಿಕೆಗಳನ್ನು ತಾನೇ ಸ್ಥಾಪಿಸಿತು; ಖಾಸಗಿಯವರು ಏನು ತಯಾರಿಸಬೇಕಾದರೂ ಕೈಗಾರಿಕಾ ಪರವಾನಗಿ ಬೇಕಿತ್ತು. ಮದುವೆಯಲ್ಲಿ ಪ್ರತಿ ಸಣ್ಣ ಕೆಲಸಕ್ಕೂ ಹಿರಿಯರ ಅನುಮತಿ ಬೇಕಾದಂತೆ — ಕೆಲಸ ತಡ, ಅನುಮತಿ ಸಿಕ್ಕ ಕೆಲವರಿಗೇ ಲಾಭ. 1991ರ ಜುಲೈ 24ರಂದು ಈ ಅನುಮತಿಯ ಗೋಡೆ ಬಹುತೇಕ ಕುಸಿಯಿತು: ಪರವಾನಗಿ 18 ಕೈಗಾರಿಕೆಗಳಿಗೆ ಮಾತ್ರ, ಸರ್ಕಾರಕ್ಕೆ ಮೀಸಲು 17ರಿಂದ 8 (ಈಗ ಎರಡು). (→ English: industrial licensing · हिन्दी: औद्योगिक लाइसेंसिंग)

In exam EnglishThe 1948 Industrial Policy Resolution set up a mixed economy with arms, atomic energy and railways as state monopolies, and the Industries (Development and Regulation) Act, 1951 brought industrial licensing. The 1956 resolution, aiming at a socialistic pattern of society, sorted industries into Schedule A (17, for the state alone), Schedule B (12, progressively state-owned) and Schedule C (the rest, open to private firms under licence). Controls hardened into the licence-permit raj: small-scale reservation from 1967, the MRTP Act, 1969 on big business houses and FERA, 1973 with a general 40 per cent cap on foreign equity. On 24 July 1991 licensing was kept for only 18 industries, public sector reservation was cut from 17 to 8 (only atomic energy and railway operations remain), MRTP prior approval ended and foreign investment up to 51 per cent in priority industries was approved automatically, the start of liberalisation, privatisation and globalisation.

ಪರವಾನಗಿಗಳು ಹೋದ ಮೇಲೆ ಹೊಸ ಭಯ: ಒಂದೇ ದೊಡ್ಡ ಕಂಪನಿ ಮಾರುಕಟ್ಟೆಯನ್ನು ಮುಷ್ಟಿಯಲ್ಲಿಟ್ಟುಕೊಳ್ಳುವುದು. ಹಾಗಾಗಿ ಸ್ಪರ್ಧಾ ಕಾಯ್ದೆ 'ಎಷ್ಟು ದೊಡ್ಡವನು' ಅಲ್ಲ, 'ಹೇಗೆ ನಡೆದುಕೊಳ್ಳುತ್ತಾನೆ' ಎಂದು ನೋಡುತ್ತದೆ — ಊರಿನ ವ್ಯಾಪಾರಿಗಳೆಲ್ಲ ಸೇರಿ ಬೆಲೆ ಏರಿಸಿದರೆ ತಪ್ಪು. ಸರ್ಕಾರಿ ಕಂಪನಿಗಳ ಷೇರು ಮಾರುವುದೇ ಬಂಡವಾಳ ಹಿಂತೆಗೆತ; ಸ್ವಲ್ಪ ಮಾರಿದರೆ ಸಾಮಾನ್ಯ, ಆಡಳಿತವನ್ನೇ ಒಪ್ಪಿಸಿದರೆ 'ಕಾರ್ಯತಂತ್ರದ' ಮಾರಾಟ — ಮೊದಲನೆಯದು ಮಾಡರ್ನ್ ಫುಡ್ (2000), ದೊಡ್ಡದು ಏರ್ ಇಂಡಿಯಾ (2022). (→ English: disinvestment · strategic sale · हिन्दी: विनिवेश · रणनीतिक बिक्री)

In exam EnglishWith licences gone, the worry became too little competition. The Competition Act, 2002 targets conduct rather than size: anti-competitive agreements such as cartels, abuse of a dominant position, and combinations above set thresholds, with a deal value test added in 2023. The MRTP Act was repealed only in 2009. Public enterprises remained, graded as Navratna and Miniratna (1997) and Maharatna (2009). disinvestment began with minority stake sales in 1991-92; the Rangarajan Committee (1993) and the Disinvestment Commission (1996) gave advice; strategic sales transferring control began with Modern Food Industries (2000), followed by BALCO (2001). DIPAM got its name in 2016, Air India was handed over in January 2022, and the 2021-22 policy keeps only a bare minimum public presence in four strategic sectors.

IIP ಒಂದು ತಿಂಗಳಲ್ಲಿ ಕಾರ್ಖಾನೆಗಳು ಎಷ್ಟು ಉತ್ಪಾದಿಸಿದವು ಎಂದು ಹೇಳುವ 'ತಕ್ಕಡಿ'. ಕೋರ್ ಸೂಚ್ಯಂಕ ಅದರಲ್ಲಿ ಕಲ್ಲಿದ್ದಲು, ಉಕ್ಕು, ಸಿಮೆಂಟ್, ವಿದ್ಯುತ್‌ನಂತಹ ಒಂಬತ್ತು ಮೂಲ ಕೈಗಾರಿಕೆಗಳನ್ನು ಮಾತ್ರ ನೋಡುತ್ತದೆ — ಅಡುಗೆಗೆ ಮೊದಲು ಬೇಳೆ, ಉಪ್ಪು, ಎಣ್ಣೆ ಇದೆಯೇ ಎಂದು ನೋಡಿದಂತೆ, ಮೊದಲೇ ಸೂಚನೆ ಕೊಡುತ್ತದೆ. ಸೂಕ್ಷ್ಮ, ಸಣ್ಣ ಮತ್ತು ಮಧ್ಯಮ ಉದ್ಯಮಗಳನ್ನು ಈಗ ಹೂಡಿಕೆ ಮತ್ತು ವಹಿವಾಟು ಎರಡರಿಂದಲೂ ಅಳೆಯುತ್ತಾರೆ; ರಫ್ತು ಲೆಕ್ಕಕ್ಕೆ ಸೇರದು. ದೊಡ್ಡ ಖರೀದಿದಾರ 45 ದಿನಗಳಲ್ಲಿ ಹಣ ಕೊಡಬೇಕು. (→ English: micro, small and medium enterprises · Index of Core Industries · हिन्दी: सूक्ष्म, लघु और मध्यम उद्यम · मूल उद्योगों का सूचकांक)

In exam EnglishIndustrial output is measured monthly by the Index of Industrial Production, compiled by the National Statistics Office (MoSPI), and by the Index of Core Industries, compiled by the Office of the Economic Adviser in DPIIT; both moved to base 2022-23 in 2026. Manufacturing carries about three-quarters of the IIP's weight. The core index now has nine industries, iron ore having joined the earlier eight, with a combined IIP weight of about a third (32.88 per cent). micro, small and medium enterprises fall under the MSMED Act, 2006. Since 1 July 2020 they are classified by investment and turnover together, with the same limits for manufacturing and services and exports left out of turnover; the limits were raised from 1 April 2025, and firms register on the Udyam portal. Support includes the 45-day payment rule, CGTMSE credit guarantees (2000) and TReDS bill discounting; product reservation ended completely in 2015.

2014ರಿಂದ ಸರ್ಕಾರ 'ಬಾಗಿಲು ತೆರೆಯುವುದು' ಮಾತ್ರವಲ್ಲ, 'ಕಾರ್ಖಾನೆಗಳನ್ನು ಕರೆತರುವುದು' ಆರಂಭಿಸಿತು. ಉತ್ಪಾದನೆ ಆಧಾರಿತ ಪ್ರೋತ್ಸಾಹಧನ ಎಂದರೆ ಎಷ್ಟು ಹೆಚ್ಚು ತಯಾರಿಸಿ ಮಾರುತ್ತೀರೋ ಅಷ್ಟು ಬಹುಮಾನ — ಪರೀಕ್ಷೆಯಲ್ಲಿ ಕಳೆದ ವರ್ಷಕ್ಕಿಂತ ಹೆಚ್ಚು ಅಂಕ ತಂದರೆ ಮಾತ್ರ ಬಹುಮಾನ ಕೊಟ್ಟಂತೆ; ಇಲ್ಲದಿದ್ದರೆ ಏನೂ ಇಲ್ಲ. ಮೊಬೈಲ್ ಫೋನ್‌ಗಳಲ್ಲಿ ಚೆನ್ನಾಗಿ ಫಲಿಸಿತು, ಆದರೆ ಅನೇಕ ಭಾಗಗಳು ಆಮದೇ ಎಂಬ ಟೀಕೆ ಇದೆ. ಕಾಂಡ್ಲಾ, ವಿಶೇಷ ವಲಯಗಳು, ಕಾರಿಡಾರ್‌ಗಳು, ಸ್ಟಾರ್ಟ್‌ಅಪ್ ಇಂಡಿಯಾ — ಎಲ್ಲದರ ಗುರಿ ಇದೇ. (→ English: production-linked incentive · Make in India · हिन्दी: उत्पादन से जुड़ा प्रोत्साहन · मेक इन इंडिया)

In exam EnglishSince 2014 policy has tried to pull manufacturing in. Make in India began on 25 September 2014, working mainly through easier rules, and the Jan Vishwas Act, 2023 amended 183 provisions in 42 central Acts to replace jail with penalties for minor lapses. The production-linked incentive scheme began in 2020 with electronics; the Union Budget 2021-22 announced schemes for 13 sectors, later 14, with about Rs 1.97 lakh crore over five years. The incentive is a share of incremental sales over a base year, paid only if targets are met; mobile phones are the clearest success, while low domestic value addition is the main criticism. Older tools continue: Kandla (1965) was Asia's first export processing zone, the SEZ policy came in 2000 and the SEZ Act in 2005; industrial corridors, starting with Delhi–Mumbai, are overseen by NICDC; and Startup India was launched in January 2016.

ರಸ್ತೆ ಕಟ್ಟುವ ಎಲ್ಲ ವಿಧಾನಗಳು ಒಂದೇ ಪ್ರಶ್ನೆಯ ಸುತ್ತ: 'ವಾಹನ ಕಡಿಮೆಯಾದರೆ ನಷ್ಟ ಯಾರದು?' EPCಯಲ್ಲಿ ಎಲ್ಲ ಸರ್ಕಾರದ್ದು. BOT (ಟೋಲ್)ನಲ್ಲಿ ಖಾಸಗಿಯದ್ದು. ವರ್ಷಾಶನ, ಹೈಬ್ರಿಡ್ ವರ್ಷಾಶನದಲ್ಲಿ ಮತ್ತೆ ಸರ್ಕಾರದ್ದು. TOTನಲ್ಲಿ ಹಳೆಯ ರಸ್ತೆಯನ್ನು ಮುಂಗಡ ಪಡೆದು ಗುತ್ತಿಗೆ ಕೊಡುತ್ತಾರೆ. ಸಾರ್ವಜನಿಕ-ಖಾಸಗಿ ಸಹಭಾಗಿತ್ವ ಎಂದರೆ ಈ ಹೊರೆಯನ್ನು ಸರಿಯಾಗಿ ಹಂಚಿಕೊಳ್ಳುವುದು. ಲಾಭ ಸಾಲದ ಒಳ್ಳೆಯ ಯೋಜನೆಗೆ ಒಮ್ಮೆ ಕೊಡುವ ನೆರವೇ ಕಾರ್ಯಸಾಧ್ಯತಾ ಅಂತರ ನಿಧಿ. (→ English: public-private partnership · viability gap funding · हिन्दी: सार्वजनिक-निजी भागीदारी · व्यवहार्यता अंतर वित्तपोषण)

In exam EnglishInfrastructure is under-supplied by markets because it needs huge upfront money, pays back slowly, needs land and yields benefits that cannot be fully charged for; the Harmonised Master List (2012) defines which sub-sectors count. Under EPC the government pays and bears all the risk. A public-private partnership shares it: in BOT (toll) the private party builds and bears traffic risk; in BOT (annuity) the government keeps the tolls and pays a fixed annuity; in BOOT the private party also owns the asset until transfer. The hybrid annuity model (2016) splits construction cost 40 per cent government and 60 per cent developer, with tolls and traffic risk staying with the government. TOT (2016) leases finished, toll-earning roads for an upfront lump sum. Viability gap funding (2006) gives a one-time capital grant of up to 20 per cent from the Centre and 20 per cent from the sponsor, 30 + 30 for certain social sector projects since 2020.

ಈಗ ಯೋಜನೆ 'ಪೈಪ್‌ಲೈನ್' ರೂಪದಲ್ಲಿ: ಬರಲಿರುವ ಎಲ್ಲ ಯೋಜನೆಗಳು ಒಂದೇ ಪಟ್ಟಿಯಲ್ಲಿ, ಎಲ್ಲ ಇಲಾಖೆಗಳ ಯೋಜನೆಗಳು ಒಂದೇ ನಕ್ಷೆಯಲ್ಲಿ. ಹಣದ ಸಮಸ್ಯೆಗೆ ದೀರ್ಘಾವಧಿ ನಿಧಿ: NIIF, NaBFID, InvIT, REIT. ಆಸ್ತಿ ನಗದೀಕರಣ ಎಂದರೆ ಆಸ್ತಿ ಮಾರುವುದಲ್ಲ — ನಮ್ಮ ಹೊಲವನ್ನು ಕೆಲವು ವರ್ಷ ಗೇಣಿಗೆ ಕೊಟ್ಟು ಮುಂಗಡ ಪಡೆದಂತೆ; ಹೊಲ ನಮ್ಮದೇ, ಮಾರುವುದಿಲ್ಲ. ಭಾರತಮಾಲಾ ರಸ್ತೆಗಳಿಗೆ, ಸಾಗರಮಾಲಾ ಬಂದರುಗಳಿಗೆ, ಉಡಾನ್ ಸಣ್ಣ ವಿಮಾನ ನಿಲ್ದಾಣಗಳಿಗೆ, ಭಾರತ್‌ನೆಟ್ ಹಳ್ಳಿಗಳ ಇಂಟರ್ನೆಟ್‌ಗೆ. (→ English: asset monetisation · National Monetisation Pipeline · हिन्दी: परिसंपत्ति मुद्रीकरण · राष्ट्रीय मुद्रीकरण पाइपलाइन)

In exam EnglishPlans now come as pipelines: the National Infrastructure Pipeline (announced 31 December 2019) listed about Rs 111 lakh crore of projects for 2019-20 to 2024-25; PM Gati Shakti (13 October 2021) puts all ministries' plans on one GIS map; and the National Logistics Policy (17 September 2022) aims for the top 25 in the Logistics Performance Index by 2030. Because bank deposits are short-term and infrastructure loans long, new long-term sources were built: NIIF (2015, government 49 per cent), NaBFID (Act of 2021, Centre at least 26 per cent), and InvITs and REITs under SEBI's 2014 regulations, which must pay out at least 90 per cent of net distributable cash flow. asset monetisation under the National Monetisation Pipeline (NITI Aayog, 23 August 2021) leases brownfield assets for about Rs 6 lakh crore over four years without selling ownership or land. Key programmes are Bharatmala (2017), Sagarmala (2015), the Eastern and Western freight corridors, UDAN (2016) and BharatNet.

Exam traps

Recap

Practice questions

Q1. The division of industries into Schedules A, B and C was made by which of the following?

  1. Industrial Policy Resolution, 1948
  2. Industries (Development and Regulation) Act, 1951
  3. Industrial Policy Resolution, 1956
  4. Statement on Industrial Policy, 1991
Show answer

Answer: C. Industrial Policy Resolution, 1956

The 1956 resolution created the three schedules. The 1948 resolution named state monopolies and six basic industries but no schedules; the 1951 Act created licensing; the 1991 statement cut public sector reservation from 17 to 8.

Q2. Consider the following statements:
1. The MRTP Act was repealed in the same year in which the Competition Act was passed.
2. The first strategic sale of a central public sector enterprise was that of Modern Food Industries.
Which of the statements given above is/are correct?

  1. 1 only
  2. 2 only
  3. Both 1 and 2
  4. Neither 1 nor 2
Show answer

Answer: B. 2 only

Statement 1 is wrong: the Competition Act was passed in 2002 but the MRTP Act was repealed only in 2009. Statement 2 is correct: Modern Food Industries (2000) came before BALCO (2001). So '1 only', 'Both' and 'Neither' are wrong.

Q3. Which one of the following industries is reserved exclusively for the public sector today?

  1. Coal mining
  2. Railway operations
  3. Defence equipment
  4. Mineral oils
Show answer

Answer: B. Railway operations

Only atomic energy and railway operations remain reserved. Coal, defence equipment and mineral oils were once reserved but have been opened to private firms over the years since 1991.

Q4. Consider the following statements about the Index of Core Industries in its series with base 2022-23:
1. It covers nine industries, including iron ore.
2. It is compiled by the National Statistics Office.
3. Its industries carry about a third of the weight in the Index of Industrial Production.
Which of the statements given above are correct?

  1. 1 and 2 only
  2. 1 and 3 only
  3. 2 and 3 only
  4. 1, 2 and 3
Show answer

Answer: B. 1 and 3 only

Statements 1 and 3 are correct (nine industries; 32.88 per cent of the IIP). Statement 2 is wrong: the core index is compiled by the Office of the Economic Adviser in DPIIT; the NSO compiles the IIP. Every option with statement 2 is therefore wrong.

Q5. Under the classification of MSMEs in force since 1 July 2020, which of the following is correct?

  1. Enterprises are classified by investment in plant and machinery alone
  2. Service enterprises have lower limits than manufacturing enterprises
  3. Both investment and turnover are used, and exports are excluded from turnover
  4. Only turnover is used, including exports
Show answer

Answer: C. Both investment and turnover are used, and exports are excluded from turnover

Since 2020 an enterprise must be within both an investment and a turnover limit, the same for manufacturing and services, with exports left out of turnover. Investment alone was the old rule; separate lower limits for services were also part of the old rule; turnover alone with exports is not the test.

Q6. Match the following:
A. Kandla
B. Production-linked incentive
C. Jan Vishwas Act
D. Hybrid annuity model
1. Asia's first export processing zone
2. Incentive on incremental sales over a base year
3. Replacing imprisonment with penalties for minor offences
4. Government pays 40 per cent of construction cost
Select the correct answer using the code given below:

  1. A-1, B-2, C-3, D-4
  2. A-1, B-3, C-2, D-4
  3. A-4, B-2, C-3, D-1
  4. A-1, B-2, C-4, D-3
Show answer

Answer: A. A-1, B-2, C-3, D-4

Kandla (1965) was the first EPZ, PLI pays on incremental sales, the Jan Vishwas Act (2023) decriminalised minor lapses, and under HAM the government pays 40 per cent. The other codes swap PLI with Jan Vishwas, Kandla with HAM, or Jan Vishwas with HAM.

Q7. Consider the following statements:
1. Under the toll-operate-transfer model, the private investor builds a new highway and collects tolls on it.
2. Viability gap funding is a one-time capital grant to PPP projects.
Which of the statements given above is/are correct?

  1. 1 only
  2. 2 only
  3. Both 1 and 2
  4. Neither 1 nor 2
Show answer

Answer: B. 2 only

Statement 1 is wrong: TOT applies to highways already built; the investor pays a lump sum for tolling rights and builds nothing new. Statement 2 is correct. So '1 only', 'Both' and 'Neither' are wrong.

Q8. With reference to infrastructure finance in India, consider the following statements:
1. NaBFID was created by an Act of Parliament.
2. The government holds a majority of NIIF's capital.
3. Under the National Monetisation Pipeline, government land is sold to private investors.
How many of the above statements are correct?

  1. Only one
  2. Only two
  3. All three
  4. None
Show answer

Answer: A. Only one

Only statement 1 is correct: NaBFID rests on the NaBFID Act, 2021. Statement 2 is wrong because the government holds 49 per cent of NIIF, not a majority; statement 3 is wrong because monetisation leases assets and excludes the sale of land. So 'Only two', 'All three' and 'None' are wrong.

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