UPSC Prelims Practice Questions — IT Ministry approves 12 more ECMS projects

Q1. With reference to the design of industrial incentive schemes, consider the following statements: Which of the statements given above is/are correct?

  1. Under a turnover-linked incentive, the payout to a firm is fixed at the time its project is approved, whatever its later sales.
  2. Compared with a turnover-linked incentive, a capex-linked subsidy leaves the government bearing more of the risk that a funded plant never produces.
  3. An incentive computed on incremental sales over a base year rewards expansion of output rather than the mere continuation of existing production.
  • A. 2 and 3 only
  • B. 1, 2 and 3
  • C. 1 and 2 only
  • D. 1 and 3 only

Q2. With reference to domestic value addition in manufacturing, consider the following statements: Which of the statements given above is/are correct?

  1. Two countries with equal gross exports of electronic goods can retain very different amounts of value domestically.
  2. Domestic value addition is measured by the number of a product's parts made within the country, irrespective of what those parts are worth.
  3. The domestic value added in a product is broadly its value less the value of the imported inputs embedded in it.
  • A. 2 and 3 only
  • B. 1 and 3 only
  • C. 1, 2 and 3
  • D. 1 only

Q3. Consider the following facts. India's electronics production and exports, led by mobile phones, have grown rapidly under incentives aimed mainly at final assembly. Domestic value addition in India's electronics manufacturing is currently about 18–20%. Which of the following inferences can be drawn from the above?

  1. A large part of the value of India's electronics output accrues to foreign suppliers of inputs.
  2. India's net foreign-exchange earnings from electronics exports are smaller than the gross export values suggest.
  3. India has become a net exporter of electronic goods taken as a whole.
  4. Assembly-focused incentives have not raised India's gross electronics production.
  • A. 2 and 4 only
  • B. 1, 2 and 3 only
  • C. 1 and 2 only
  • D. 1, 3 and 4 only

Q4. Several recent projects approved under the Electronics Component Manufacturing Scheme make copper foil and copper clad laminates. In this context, consider the following statements: Which of the statements given above is/are correct?

  1. Copper clad laminates are made by bonding copper foil to an insulating base, so a laminate plant is a downstream buyer from a copper foil plant.
  2. Copper foil is a semiconductor material, so copper foil plants form part of the chip fabrication layer of the value chain.
  3. Etching away unwanted copper from a laminate leaves the conducting tracks that link the components mounted on a printed circuit board.
  • A. 1 and 2 only
  • B. 2 and 3 only
  • C. 1 only
  • D. 1 and 3 only

Q5. With reference to measuring the progress of a production-incentive scheme such as the Electronics Component Manufacturing Scheme, consider the following statements: Which of the statements given above are correct?

  1. A scheme's financial outlay is the amount the government budgets for incentives, not the private capital the scheme expects to attract.
  2. If investment committed by approved applicants exceeds the scheme's investment target, the scheme's budgeted outlay must also have been exceeded.
  3. Committed investment can exceed the investment target even while most approved plants have yet to begin production.
  4. Realised investment can fall short of committed investment if some approved firms delay or abandon their projects.
  • A. 3 and 4 only
  • B. 1, 3 and 4 only
  • C. 1, 2, 3 and 4
  • D. 1 and 2 only

Q6. Suppose India, which imports most of its electronic components from a small number of supplier countries, builds substantial domestic capacity for copper foil, laminates and other components. In this context, consider the following likely outcomes: Which of the statements given above is/are correct?

  1. Indian assemblers become less exposed to export restrictions or disruptions in those supplier countries.
  2. The import content of each unit of electronics produced in India tends to fall.
  3. India may still need to import raw materials such as copper even as its imports of finished components fall.
  • A. 1, 2 and 3
  • B. 1 and 3 only
  • C. 2 and 3 only
  • D. 1 and 2 only