UPSC Prelims Practice Questions — ‘PLI plan warps 2W market, junks innovation-led firms’

Q1. With reference to the sectors covered under the Production Linked Incentive (PLI) schemes announced for 14 key manufacturing sectors, consider the following: 1. Drones and Drone Components 2. Advanced Chemistry Cell (ACC) Battery 3. Specialty Steel 4. Semiconductors and Display Fabrication Which of the above is/are correctly identified as sectors covered under the ₹1.97 lakh crore PLI framework?

  1. Drones and Drone Components
  2. Advanced Chemistry Cell (ACC) Battery
  3. Specialty Steel
  4. Semiconductors and Display Fabrication
  • A. 1 and 3 only
  • B. 1, 2 and 3 only
  • C. 2, 3 and 4
  • D. 1, 2, 3 and 4

Q2. Consider the following statements comparing the PLI framework with earlier input-based manufacturing incentives: 1. Unlike traditional input-based subsidies, PLI ties incentives to incremental sales of goods manufactured in India over a defined base year. 2. The PLI schemes across the 14 sectors were announced with a total outlay of ₹1.97 lakh crore. 3. Under PLI every one of the 14 sectors receives an identical rate of incentive on incremental sales. Which of the statements given above is/are correct?

  1. Unlike traditional input-based subsidies, PLI ties incentives to incremental sales of goods manufactured in India over a defined base year.
  2. The PLI schemes across the 14 sectors were announced with a total outlay of ₹1.97 lakh crore.
  3. Under PLI every one of the 14 sectors receives an identical rate of incentive on incremental sales.
  • A. 1 only
  • B. 1 and 2 only
  • C. 2 and 3 only
  • D. 1, 2 and 3

Q3. Under the PLI Scheme for Automobile and Auto Components, which one of the following is the highest incentive rate offered for Advanced Automotive Technology components based on electric vehicle / hydrogen fuel cell technology?

  • A. 8%
  • B. 13%
  • C. 18%
  • D. 25%

Q4. With reference to the PLI Scheme for Automobile and Auto Component Industry, consider the following statements: 1. It was approved by the Union Cabinet in September 2021. 2. It has a budgetary outlay of ₹25,938 crore. 3. It comprises the Champion OEM Incentive Scheme and the Component Champion Incentive Scheme. 4. Its incentive disbursement period commenced in FY 2021-22. Which of the above is/are NOT correct?

  1. It was approved by the Union Cabinet in September 2021.
  2. It has a budgetary outlay of ₹25,938 crore.
  3. It comprises the Champion OEM Incentive Scheme and the Component Champion Incentive Scheme.
  4. Its incentive disbursement period commenced in FY 2021-22.
  • A. 1 only
  • B. 2 and 3
  • C. 4 only
  • D. 1 and 4

Q5. According to the 2026 impact assessment of the Auto PLI on the two-wheeler EV industry by the Centre for Digital Economy Policy Research, the annual sales growth of non-PLI firms recorded its steepest contraction, falling to which one of the following figures in FY24?

  • A. -33%
  • B. -11%
  • C. 407%
  • D. -50%

Q6. Consider the following statements based on the 2026 Centre for Digital Economy Policy Research assessment comparing PLI-approved and non-PLI two-wheeler EV firms: 1. Non-PLI models accounted for about 77% of e-2W export volumes. 2. PLI-approved OEMs were estimated to enjoy a 13–16% cost advantage over non-PLI firms. 3. Of the nine e-2W OEMs approved under the scheme, all nine were manufacturing and retailing vehicles. Which of the statements given above is/are correct?

  1. Non-PLI models accounted for about 77% of e-2W export volumes.
  2. PLI-approved OEMs were estimated to enjoy a 13–16% cost advantage over non-PLI firms.
  3. Of the nine e-2W OEMs approved under the scheme, all nine were manufacturing and retailing vehicles.
  • A. 1 and 2 only
  • B. 2 and 3 only
  • C. 1 and 3 only
  • D. 1, 2 and 3

Q7. Which one of the following best describes the Electric Mobility Promotion Scheme (EMPS), 2024?

  • A. A short-duration demand-incentive scheme for electric two- and three-wheelers that was subsequently subsumed under the PM E-DRIVE Scheme
  • B. A production-linked incentive scheme for domestic manufacturing of EV battery cells under the Ministry of Heavy Industries
  • C. A dedicated charging-infrastructure scheme that permanently replaced FAME India Phase-II
  • D. A capital-subsidy scheme created exclusively for EV startups excluded from the Auto PLI

Q8. Consider the following statements comparing India's electric vehicle support schemes: 1. FAME India Phase-II was notified in 2019 with an initial outlay of ₹10,000 crore. 2. The PM E-DRIVE Scheme, which came into effect in October 2024, has a financial outlay of ₹10,900 crore. 3. Both the FAME India Scheme and the PM E-DRIVE Scheme are administered by the Ministry of Road Transport and Highways. Which of the statements given above is/are correct?

  1. FAME India Phase-II was notified in 2019 with an initial outlay of ₹10,000 crore.
  2. The PM E-DRIVE Scheme, which came into effect in October 2024, has a financial outlay of ₹10,900 crore.
  3. Both the FAME India Scheme and the PM E-DRIVE Scheme are administered by the Ministry of Road Transport and Highways.
  • A. 1 and 2 only
  • B. 1 and 3 only
  • C. 2 and 3 only
  • D. 1, 2 and 3

Q9. Under the Champion OEM Incentive Scheme of the Auto PLI, which one of the following is the minimum cumulative new domestic investment required over five years for OEMs other than two- and three-wheeler manufacturers?

  • A. ₹2,000 crore
  • B. ₹1,000 crore
  • C. ₹500 crore
  • D. ₹250 crore

Q10. With reference to the debate over Auto PLI eligibility thresholds, consider the following firms: 1. Ather Energy 2. Euler Motors 3. River Mobility 4. Hero MotoCorp Which of the above is/are correctly identified as EV startups cited as potential beneficiaries of relaxed PLI eligibility norms?

  1. Ather Energy
  2. Euler Motors
  3. River Mobility
  4. Hero MotoCorp
  • A. 1 and 2 only
  • B. 1, 2 and 3 only
  • C. 2, 3 and 4
  • D. 1, 2, 3 and 4

Q11. In 2026 a Department-Related Parliamentary Standing Committee recommended introducing 'calibrated flexibility' in Auto PLI eligibility for e-2W startups. Which one of the following ministries was directed to operationalise this eligibility relaxation?

  • A. Ministry of Heavy Industries
  • B. Ministry of Commerce and Industry
  • C. Ministry of Micro, Small and Medium Enterprises
  • D. Ministry of Road Transport and Highways

Q12. With reference to India's industrial policy framework, consider the following statements: 1. The Make in India initiative was launched in 2014. 2. The National Manufacturing Policy, 2011 set a target of raising the share of manufacturing in GDP to 25%. 3. The PLI schemes for 14 sectors were announced with a total outlay of ₹1.97 lakh crore. 4. Make in India 2.0 currently focuses on only 8 sectors. Which of the statements given above is/are correctly identified?

  1. The Make in India initiative was launched in 2014.
  2. The National Manufacturing Policy, 2011 set a target of raising the share of manufacturing in GDP to 25%.
  3. The PLI schemes for 14 sectors were announced with a total outlay of ₹1.97 lakh crore.
  4. Make in India 2.0 currently focuses on only 8 sectors.
  • A. 1 and 3 only
  • B. 1, 2 and 3 only
  • C. 2, 3 and 4
  • D. 1, 2, 3 and 4