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Quick recap: Industry and infrastructure on one page

मराठीत स्पष्टीकरण

Industry and infrastructure · Quick recap · Fact-checked on 25 October 2026 · 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 Marathi (मराठी), 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 Marathi and revise it in English.

हे प्रकरण एकच प्रवास: सरकार 'परवानगी देणारे, स्वतः चालवणारे' (भाग 1) यातून 'मोजणारे, प्रोत्साहन देणारे' (भाग 2) आणि मग रस्ते, वीज बांधताना खाजगी क्षेत्रासोबत भार वाटून घेणारे (भाग 3). इथे तिन्ही एकाच पानावर. (→ 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
Part	Main laws, bodies and schemes	Key dates and numbers
1. Industrial policy and the 1991 reforms	IPR 1948 and 1956, IDRA 1951, MRTP 1969, FERA 1973, Competition Act 2002, CPSE grades, DIPAM	Schedule A 17, B 12; 24 July 1991: licensing for 18, reservation 17 to 8 (now 2); MRTP repealed 2009; Maharatna 2009; Air India 2022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 today	IIP (NSO), core index (OEA, DPIIT), MSMED Act 2006, Udyam, CGTMSE, TReDS, Make in India, PLI, SEZ Act 2005, NICDC, Startup India	Base 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 financing	EPC, BOT, BOOT, HAM, TOT, VGF, NIP, PM Gati Shakti, NIIF, NaBFID, InvITs, REITs, National Monetisation Pipeline	HAM 40:60 (2016); VGF 20 + 20 (2006); NIP about Rs 111 lakh crore; NaBFID 2021; NMP about Rs 6 lakh crore (2021)

1948 आणि 1956 मध्ये सरकारने मोठे उद्योग स्वतः उभारले; खाजगी कंपन्यांना काहीही बनवायचे तर औद्योगिक परवाना लागायचा. लग्नात प्रत्येक छोट्या कामाला वडीलधाऱ्यांची परवानगी लागावी तसे — काम उशिरा, परवानगी मिळालेल्या थोड्यांनाच फायदा. 24 जुलै 1991 ला ही परवान्यांची भिंत बहुतांश कोसळली: परवाना फक्त 18 उद्योगांना, सरकारसाठी राखीव 17 वरून 8 (आता दोन). (→ 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.

परवाने गेल्यावर नवी भीती: एकच मोठी कंपनी बाजार मुठीत घेईल. म्हणून स्पर्धा कायदा 'किती मोठा' हे नव्हे तर 'कसा वागतो' हे पाहतो — गावातल्या सगळ्या व्यापाऱ्यांनी मिळून भाव वाढवले तर गुन्हा. सरकारी कंपन्यांतील हिस्सा विकणे म्हणजे निर्गुंतवणूक; थोडा विकला तर साधी, व्यवस्थापनच सोपवले तर 'धोरणात्मक' विक्री — पहिली मॉडर्न फूड (2000), मोठी एअर इंडिया (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 म्हणजे एका महिन्यात कारखान्यांनी किती उत्पादन केले ते सांगणारा 'तराजू'. मूलभूत उद्योग निर्देशांक त्यातील कोळसा, पोलाद, सिमेंट, वीज अशा नऊ पायाभूत उद्योगांकडेच पाहतो — स्वयंपाकाआधी डाळ, मीठ, तेल आहे का ते पाहावे तसे, आधीच सूचना देतो. सूक्ष्म, लघु आणि मध्यम उद्योग आता गुंतवणूक आणि उलाढाल दोन्हींनी मोजले जातात; निर्यात हिशेबात धरली जात नाही. मोठ्या खरेदीदाराने 45 दिवसांत पैसे द्यायलाच हवेत. (→ 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.

2014 पासून सरकारने 'दार उघडणे' एवढेच नव्हे तर 'कारखाने बोलावून आणणे' सुरू केले. उत्पादन संलग्न प्रोत्साहन म्हणजे जितके जास्त बनवून विकाल तितके बक्षीस — परीक्षेत मागच्या वर्षीपेक्षा जास्त गुण आणले तरच बक्षीस द्यावे तसे; नाही तर काहीच नाही. मोबाइल फोनमध्ये हे चांगले चालले, पण अनेक भाग आयातच आहेत अशी टीका आहे. कांडला, विशेष क्षेत्रे, मार्गिका, स्टार्टअप इंडिया — सगळ्यांचे हेच ध्येय. (→ 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.

रस्ता बांधण्याच्या सगळ्या पद्धती एकाच प्रश्नाभोवती: 'गाड्या कमी आल्या तर तोटा कोणाचा?' EPC मध्ये सगळा सरकारचा. BOT (टोल) मध्ये खाजगी कंपनीचा. वार्षिकी आणि हायब्रिड वार्षिकीत पुन्हा सरकारचा. TOT मध्ये जुना रस्ता आधी पैसे घेऊन ठेक्याने दिला जातो. सार्वजनिक-खाजगी भागीदारी म्हणजे हा भार नीट वाटून घेणे. नफा पुरेसा नसलेल्या चांगल्या प्रकल्पाला एकदाच दिलेली मदत म्हणजे व्यवहार्यता तफावत निधी. (→ 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.

आता नियोजन 'पाइपलाइन' स्वरूपात: येणारे सगळे प्रकल्प एकाच यादीत, सगळ्या विभागांचे नियोजन एकाच नकाशावर. पैशाच्या प्रश्नासाठी दीर्घ मुदतीचा निधी: NIIF, NaBFID, InvIT, REIT. मालमत्ता मुद्रीकरण म्हणजे मालमत्ता विकणे नव्हे — आपले शेत काही वर्षे खंडाने देऊन आधीच पैसे घेतल्यासारखे; शेत आपलेच, विकत नाही. भारतमाला रस्त्यांसाठी, सागरमाला बंदरांसाठी, उडान छोट्या विमानतळांसाठी, भारतनेट गावांतील इंटरनेटसाठी. (→ 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

Schedules A, B and C belong to the 1956 resolution, not 1948; licensing itself came from the IDRA, 1951, a law, not from either resolution.
In 1991 licensing stayed for 18 industries and public sector reservation fell from 17 to 8; today only atomic energy and railway operations are reserved.
The Competition Act dates from 2002 but the MRTP Act was repealed only in 2009. Navratna and Miniratna date from 1997, Maharatna from 2009.
The first strategic sale was Modern Food Industries (2000), not BALCO (2001) or Air India (January 2022).
The core index now has nine industries (iron ore added) and about a third of the IIP's weight, not more than half. Both indices moved to base 2022-23.
MSMEs are classified by investment AND turnover since 1 July 2020, with the same limits for manufacturing and services; exports are excluded from turnover.
Under HAM the government pays 40 per cent and keeps the traffic risk; TOT is for roads already built; VGF is a capital grant of up to 20 per cent from the Centre.
The National Monetisation Pipeline leases assets without selling ownership or land; InvITs and REITs are regulated by SEBI; NIIF is a fund (government 49 per cent) while NaBFID is a statutory DFI (Centre at least 26 per cent).

Recap

1948: mixed economy; IDRA 1951: licensing. 1956: Schedules A (17), B (12), C; heavy industry first.
Licence-permit raj: small-scale reservation from 1967, MRTP 1969, FERA 1973 (40 per cent foreign equity cap).
24 July 1991: licensing for 18, reservation 17 to 8 (now 2), MRTP approval ended, 51 per cent FDI automatic; LPG.
Competition Act 2002 (MRTP repealed 2009); CPSE grades 1997 and 2009; disinvestment from 1991-92, first strategic sale 2000, DIPAM 2016, Air India 2022.
IIP (NSO) and core index (OEA, DPIIT) on base 2022-23; nine core industries, about a third of the IIP.
MSMEs: MSMED Act 2006; investment-and-turnover test since 1 July 2020, raised from 1 April 2025; Udyam; 45-day rule, CGTMSE, TReDS; dereservation completed 2015.
Make in India (2014), Jan Vishwas Act (2023), PLI (2020; 13 sectors, later 14, about Rs 1.97 lakh crore), Kandla 1965, SEZ Act 2005, NICDC, Startup India (2016).
PPP models: EPC, BOT (toll and annuity), BOOT, HAM (2016, 40:60), TOT (2016); VGF (2006, 20 + 20).
NIP (about Rs 111 lakh crore), PM Gati Shakti (2021), Logistics Policy (2022), NIIF (2015), NaBFID (2021), InvITs and REITs (SEBI, 2014), National Monetisation Pipeline (2021, about Rs 6 lakh crore).

Practice questions

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

Industrial Policy Resolution, 1948
Industries (Development and Regulation) Act, 1951
Industrial Policy Resolution, 1956
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 only
2 only
Both 1 and 2
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?

Coal mining
Railway operations
Defence equipment
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 and 2 only
1 and 3 only
2 and 3 only
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?

Enterprises are classified by investment in plant and machinery alone
Service enterprises have lower limits than manufacturing enterprises
Both investment and turnover are used, and exports are excluded from turnover
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:

A-1, B-2, C-3, D-4
A-1, B-3, C-2, D-4
A-4, B-2, C-3, D-1
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 only
2 only
Both 1 and 2
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?

Only one
Only two
All three
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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Sources

The Industries (Development and Regulation) Act, 1951; the MRTP Act, 1969; FERA, 1973; FEMA, 1999; the Competition Act, 2002; the MSMED Act, 2006; the SEZ Act, 2005; the Jan Vishwas (Amendment of Provisions) Act, 2023; the NaBFID Act, 2021; the Electricity Act, 2003 — https://www.indiacode.nic.in
Industrial Policy Resolutions of 1948 and 1956 and the Statement on Industrial Policy of 24 July 1991 (published by DPIIT); DIPAM and Department of Public Enterprises guidelines and releases — https://dpiit.gov.in
MoSPI: Index of Industrial Production, base 2022-23 (2026); OEA, DPIIT: Index of Core Industries, base 2022-23 (July 2026); Ministry of MSME: classification notifications (2020, 2025) and Udyam; DPIIT: Make in India, PLI, Startup India (PIB releases) — https://pib.gov.in
Department of Economic Affairs: Harmonised Master List, Viability Gap Funding Scheme (2006, revamped 2020), National Infrastructure Pipeline task force report (2020); MoRTH: hybrid annuity and TOT models (2016); DPIIT: PM Gati Shakti (2021) and National Logistics Policy (2022) — https://dea.gov.in
NITI Aayog: National Monetisation Pipeline (23 August 2021); SEBI (InvIT) and (REIT) Regulations, 2014 — https://www.niti.gov.in
Union Budget 2021-22, Budget Speech: New Public Sector Enterprise Policy and PLI schemes; Union Budget 2025-26: revised MSME limits — https://www.indiabudget.gov.in