Complete  Notes on Industry and Services  for BPSC and Other Competitive Exams in 2025

Complete  Notes on Industry and Services  for BPSC and Other Competitive Exams in 2025

Economics- 3

Here’s a comprehensive set of notes on Industry and Services in the Indian Economy — covering Industrial Policies (1948, 1956, 1991), MSME Sector, and flagship initiatives like Start-up India, Make in India, and Digital India.

Industry and Services in Indian Economy

Industry and services play a vital role in transforming India from an agrarian economy to a modern and diversified economy, contributing ~31% (industry) and ~55% (services) to India’s GDP.

Industrial Policies of India

Industrial policy is a set of strategies and regulations by the government to guide the industrial development of the country.

1. Industrial Policy Resolution, 1948

Context: Post-independence India needed industrialization to ensure economic self-reliance.

Key Features:

• Introduced the Mixed Economy Model.
• Division of industries into 4 categories:
  1. Strategic industries – exclusively government (e.g., defense, atomic energy).
  2. Key industries – major government role, private allowed (e.g., railways).
  3. Controlled industries – licensing needed.
  4. Others – open to private.

Significance:

• First attempt to define state vs. private role in industry.

2. Industrial Policy Resolution, 1956

Context: Based on Mahalanobis Model, during the Second Five-Year Plan.

Key Features:

• Strengthened the public sector.
• Classified industries into Schedule A, B, and C:
  • A: Exclusive government monopoly (17 industries).
  • B: Mixed sector.
  • C: Open to private sector.
• Emphasized planned industrial development.
• License Raj system strengthened.
• Promoted import substitution and self-reliance.

Significance:

• Known as the Economic Constitution of India.
• Led to the rise of Public Sector Undertakings (PSUs).

3. New Industrial Policy, 1991

Context: Launched during economic crisis (foreign exchange, fiscal deficit, BoP crisis).

Key Features:

• Liberalization: Industrial licensing abolished for all but 6 industries.
• Privatization: Reduced role of public sector; allowed disinvestment.
• Globalization: Opened Indian markets to FDI and global competition.
• MRTP Act amended: Ended restrictions on large business houses.

Significance:

• Marked the beginning of economic reforms in India.
• Boosted private investment, export, and FDI inflow.
• Promoted competition and efficiency.

MSME Sector (Micro, Small & Medium Enterprises)

Definition (as per 2020 revised classification):

Importance:

• Accounts for 30% of GDP and 48% of exports.
• Provides employment to over 11 crore people.
• Backbone of Atmanirbhar Bharat Abhiyan.

Challenges:

• Limited access to credit and markets.
• Skill gaps and technology lag.
• Compliance burden and informality.

Government Support

• Udyam Registration portal.
• Credit Guarantee Scheme, PMEGP, MUDRA loans.
• Emergency Credit Line Guarantee Scheme (ECLGS) during COVID-19.

Flagship Initiatives

1. Start-up India

Launched: 2016
Objective: Promote entrepreneurship and innovation.

Key Features:

• Self-certification for 9 labour and 3 environmental laws.
• 80% rebate in patent filing fees.
• Tax holiday for 3 consecutive years.
• Fund of Funds (₹10,000 crore) managed by SIDBI.
• Start-up India Hub as a single-window support.

2. Make in India

Launched: 2014
Objective: Encourage domestic manufacturing and attract FDI.

Key Targets:

• Raise manufacturing share to 25% of GDP.
• Create 100 million jobs by 2025.

Sectors Focused: 25 sectors including Defense, Railways, Textiles, Electronics.

Achievements:

• Boost in FDI inflows.
• Rise in electronics and mobile manufacturing.
• Global investor confidence in Indian market.

3. Digital India

Launched: 2015
Objective: Transform India into a digitally empowered society and knowledge economy.

Major Pillars:

1. Digital Infrastructure – Aadhaar, BharatNet, CSCs.
2. Digital Services – e-Governance, UMANG, DigiLocker.
3. Digital Empowerment – Digital literacy, language diversity.

Achievements:

• Over 50 crore internet users.
• UPI revolution in digital payments.
• Direct Benefit Transfer (DBT) success.
• Boost to e-governance and transparency.

Objective Questions (MCQs)

1. Which industrial policy introduced liberalization, privatization, and globalization in India?
A) 1948
B) 1956
C) 1991
D) 2000
Answer: C

2. The 1956 Industrial Policy divided industries into how many categories?
A) Two
B) Three
C) Four
D) Five
Answer: B

3. Start-up India was launched in the year:
A) 2014
B) 2015
C) 2016
D) 2017
Answer: C

4. What is the maximum annual turnover limit for a medium enterprise (as per 2020 definition)?
A) ₹100 crore
B) ₹250 crore
C) ₹50 crore
D) ₹500 crore
Answer: B

5. Which sector provides the largest employment after agriculture in India?
A) IT Sector
B) MSME Sector
C) Banking
D) Heavy Industry
Answer: B

6. What is the main goal of the Make in India initiative?
A) Import more consumer goods
B) Boost foreign employment
C) Promote domestic manufacturing and job creation
D) Replace agriculture with services
Answer: C

7. Digital India primarily focuses on:
A) Expanding rail connectivity
B) Making India energy self-reliant
C) Digital infrastructure and governance
D) Rural electrification
Answer: C