Industrial Sector (Part – III)

Total Questions: 50

41. Which of the following is a benefit of industrial development and foreign trade? [M.P.P.C.S. (Pre) 2022]

(a) Increased competition
(b) Reduced availability of goods
(c) Decreased economic growth
(d) Higher unemployment rates

Correct Answer: (a) Increased competition

Solution:Among the given options, increased competition is a benefit of industrial development and foreign trade. Increased availability of goods, increase in economic growth and lower unemployment rates are some other major benefits of industrial development and foreign trade.

42. Which of the following is a social objective of business? [U.P.R.O./A.R.O. (Re -Exam) (Pre) 2016]

(a) Innovation
(b) Employment generation
(c) Business coordination
(d) Risk management

Correct Answer: (b) Employment generation

Solution:It is generally believed that a business has a single objective, that is, to make profit. But it cannot be the only objective of business. Business objectives also need to be aimed at contributing to national goal and aspirations as well as towards international well-being.

Objectives of Business
Economic Objectives	Social Objectives
1. Profit Earning	1. Production and Supply of Quality Good and Services
2. Creation of Customers	2. Adoption of Fair Trade Practices
3. Regular Innovations	3. Contribution to the General Welfare of the Society
4. Best possible use of Resources	4. Employment Generation

43. Why companies go for business process re-engineering with help of technology? [R.A.S./R.T.S.(Pre) 2018]

(a) Customers' demand and expectations are continuously increasing
(b) IT being leveraged to provide competitive edge in products and service at lower costs
(c) The pace of change has accelerated with the liberalization of economies world over
(d) All of these

Correct Answer: (d) All of these

Solution:Business process re-engineering is the act of recreating a core business process with the goal of improving product output, quality, or reducing costs. At present, the pace of change has accelerated with the liberalisation of economies world over and customer's demand and expectations are continuously increasing. Hence, companies go for business process re-engineering with the help of technology and IT being leveraged to provide competitive edge in products and services at lower costs.

44. Match List-I with List-II and select the correct answer using the codes given below the lists: [U.P.P.C.S. (Spl.) (Mains) 2008]

List - I	List - II
(Type of Organization)	(Important Features)
A. Sole trader	1. Large number of risk bearers
B. Partnership	2. Betterment of weaker sections
C. Co-operatives	3. Contractual Relationship
D. Public Limited Company	4. Unlimited liability

Codes :

	A	B	C	D
(a)	1	2	3	4
(b)	4	3	2	1
(c)	4	2	3	1
(d)	1	3	2	4

Correct Answer: (b)

Solution:In a sole trader/sole proprietorship firm, the liability of the proprietor is unlimited, i.e. it is in addition to the capital investment in the firm. Partnership is a contractual relation- ship that means a partnership is entered into by an agreement which can be written or oral. The primary goal of cooperatives is to serve the members and not to make profit. In a public limited company, the company raises capital from the sale of its shares, so there is a large number of risk takers

45. With reference to the expenditure made by an organisation or a company, which of the following statements is/are correct? [I.A.S (Pre) 2022]

1. Acquiring new technology is capital expenditure.

2. Debt financing is considered capital expenditure, while equity financing is considered revenue expenditure.

Select the correct answer using the code given below:

(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2

Correct Answer: (a) 1 only

Solution:

A capital expenditure (CapEx) is the money organisations of companies use to purchase, upgrade, or extend the life of an asset. Capital expenditures are designed to be used to in- vest in the company's long-term financial health. Types of capital expenditure can include purchases of property, equipment, land, computers, furniture, software, etc. Thus, ac- quiring new technology is also a capital expenditure. Hence, statement 1 is correct.

To raise capital for business needs, companies primarily have two types of financing as an option: equity financing and debt financing. Debt financing involves the borrowing of money whereas equity financing involves selling a portion of equity in the company. Both debt financing and equity financing are considered as part of capital receipts for the company, as capital receipts are receipts that create li- abilities or reduce financial assets. Funds from these would be used by the company for capital expenditure such as to grow or expand its operations. Hence, statement 2 is incorrect.

46. What does venture capital mean? [I.A.S (Pre) 2014]

(a) A short-term capital provided to industries
(b) A long-term start-up capital provided to new entrepreneurs
(c) Funds provided to industries at times of incurring losses.
(d) Funds provided for replacement and renovation of industries.

Correct Answer: (b) A long-term start-up capital provided to new entrepreneurs

Solution:Venture Capital (VC) is a form of private equity and a type of financing that investors provide to start-up companies and small businesses that are believed to have long-term growth potential. Venture capital generally comes from well-off investors, investment banks, and any other financial institution. Hence, venture capital is the long-term initial capita. made available for new entrepreneurs.

47. The first Industrial Policy of the India was announced in: [U.P.U.D.A./L.D.A. (Mains) 2010]

(a) 1947
(b) 1948
(c) 1950
(d)1956

Correct Answer: (b) 1948

Solution:After Independence, India's first Industrial Policy was announced by Dr. Shyama Prasad Mukherjee, the then Minister of Industry in April, 1948. This outlined the approach to industrial growth and development. It emphasized the importance to the economy of securing a continuous increase in production and ensuring its equitable distribution. It made clear that India is going to have a Mixed Economic Model.

48. Concept of 'Joint Sector' for industrial development of India was envisaged in Industrial Policy Resolution of: [U.P.P.C.S. (Spl.) (Mains) 2004]

(a) 1948
(b) 1956
(c) 1980
(d) 1991

Correct Answer: (b) 1956

Solution:India's second Industrial Policy Resolution was put before the Parliament by Pt. Jawaharlal Nehru in April, 1956. In this policy, main objective was to step up the industrial growth rate and for this acceleration in industrialization was needed. The priorities of this policy includes, acclerating the industrialization process, expand public and co-operative sectors, bring equality in distribution of wealth and income and to prevent the monopolistic tendency in this sector. Concept of 'Joint Sector' harmonious industrial development was envisaged in this policy. The joint sector was envisaged as something in between the public and the private sector and in which the State could actively participate in management, control and decision-making.

49. In which year was the industrial Policy Resolution adopted? [B.P.S.C (Pre) 2023]

(a) 1956
(b) 1954
(c) 1952
(d) 1950

Correct Answer: (a) 1956

50. The licensing policy for the industries drew strength from: [U.P.P.C.S. (Mains) 2007*]

(a) Industrial Policy Resolution 1948
(b) Industrial Policy Resolution 1956
(c) Congress Party Resolution of establishing socialistic pattern of society
(d) Industries Act 1951

Correct Answer: (d) Industries Act 1951

Solution:The licensing policy for the industries drew strength from the Industries (Development and Regulation) Act, 1951. The main objectives of the Act are to empower the Government:

1. to take necessary steps for the regulation and development of important industries.

2. to implement the Industrial Policy.

3. to regulate the pattern and direction of industrial development..

4. to control the activities, performance and results of industrial undertakings in the public interest.

A system of licensing is introduced under the Act to regulate planning and future development of new undertaking on sound and balance lines and may be deemed expedient in the opinion of the Central Government

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