BPSC 71st CCE Prelims General Studies · Question 67 of 150

Correct — C, Both 1 and 2 are correct. Atmanirbhar Bharat, announced by the Prime Minister on 12 May 2020 in the middle of the first COVID-19 lockdown with a headline package of about Rs 20 lakh crore — roughly a tenth of GDP — was never one scheme with one budget line. It is an umbrella, and the Finance Minister released its content in tranches from 13 May 2020 onwards. Judge the two statements against the instruments that umbrella actually created and both survive. Statement 1 is not even a paraphrase: the Press Information Bureau release of 2 August 2023 from the Ministry of Commerce & Industry is titled 'Production Linked Incentive Schemes for 14 key sectors aim to enhance India's manufacturing capabilities and exports', and its opening line reads that PLI schemes for 14 key sectors 'have been announced with an outlay of Rs. 1.97 lakh crore (over US$26 billion) to enhance India's Manufacturing capabilities and Exports'. BPSC has lifted that phrase almost word for word. Statement 2 comes from the same release, which states that the purpose of the PLI schemes is 'to attract investments in key sectors and cutting-edge technology; ensure efficiency and bring economies of size and scale in the manufacturing sector and make Indian companies and manufacturers globally competitive'. The mechanism makes that concrete: PLI pays an incentive on incremental sales of goods manufactured in India over a base year, so a foreign firm earns nothing at all unless it physically produces here — which is exactly what 'incentivizing foreign investments for domestic production' describes. The same package went further and raised the foreign investment ceiling in defence manufacturing from 49% to 74% under the automatic route. The Commission reasoned along the same lines when it rejected objections to this item: it pointed to PLI and the MSME measures for building manufacturing capability and exports, and to the creation of a favourable business environment to attract FDI, and held both statements correct.

• (a)1 is correct — This picks the easier statement and then rejects the harder one. But attracting investment is not a by-product of PLI, it is written into the Government's own statement of purpose — 'to attract investments in key sectors and cutting-edge technology' — and it is built into the payout rule, which releases money only against incremental sales of goods made in India. A candidate choosing (a) has read the export objective and stopped reading.
• (b)2 is correct — This drops the more explicit of the two. The words in statement 1 — enhancing manufacturing capabilities and exports across the industries — are close to a verbatim reproduction of PIB's own headline for the PLI schemes. Rejecting statement 1 would require believing that a Rs 1.97 lakh crore production-linked programme spread over 14 manufacturing sectors is not about manufacturing or exports.
• (d)Neither 1 nor 2 is correct — Reachable only by arguing from the name rather than from the policy. 'Atmanirbhar' translates as self-reliant, and a candidate who equates self-reliance with autarky will conclude that the programme must both distrust exports and shut foreign capital out. The record is the opposite on both counts: exports are a stated objective, and the FDI ceiling in defence manufacturing was raised, not lowered.

Atmanirbhar Bharat Abhiyan is best understood as an industrial-policy umbrella with five stated pillars — economy, infrastructure, technology-driven system, vibrant demography and demand — under which several distinct instruments were rolled out from May 2020. The manufacturing instrument is the Production Linked Incentive scheme. Its logic is a deliberate break from the older Indian habit of subsidising inputs and capital: PLI pays nothing for building a factory and nothing for hiring, and pays only on incremental sales of a specified product manufactured in India over a fixed base year, within a capped budget and a five-year window, each sector administered by its own nodal ministry. That output-linked design is what makes the scheme nationality-blind — an Indian firm and a foreign firm are paid on the same terms, and both must produce inside India to be paid at all. The credit instrument is the MSME limb: the definition of a micro, small or medium enterprise was recast around a composite investment-and-turnover test applying equally to manufacturing and services, so that a firm no longer lost its benefits merely by growing, and the Emergency Credit Line Guarantee Scheme announced in the first tranche on 13 May 2020 offered about Rs 3 lakh crore of collateral-free loans carrying a full government guarantee. The investment limb liberalised foreign ownership, most visibly by raising defence manufacturing from 49% to 74% on the automatic route. The slogan attached to all of it — 'vocal for local, local goes global' — is a fair summary of the intent: build productive capacity inside India, from whatever source of capital, and sell it abroad.

The trap here is semantic, and it is one BPSC sets often. 'Atmanirbhar' means self-reliant, and a candidate who reasons from the word alone will assume the programme must discourage foreign investment and reject statement 2. The corrective habit is simple: when a scheme's name suggests a philosophy, do not argue from the philosophy — list the instruments the scheme actually created and test each statement against those. Here the instruments are PLI, the MSME redefinition with guaranteed credit, and higher FDI ceilings, and all three point the same way, towards production located in India by whoever is willing to fund it. There is also a structural tell in the option set worth learning. In a two-statement question offering '1 only / 2 only / both / neither', a planted false statement almost always carries a falsifiable specific — a number, a year, an exclusive word like 'only', 'solely' or 'all States'. Neither statement here carries one. Both are broad objective-style claims of the kind lifted straight from a ministry's own description of its scheme, which is precisely what happened. When both statements read like sentences from a PIB release and neither contains a checkable specific to trip on, 'both' is the disciplined default — and the Commission's disposal of the objections confirms it here.

• Atmanirbhar Bharat Abhiyan was announced by the Prime Minister on 12 May 2020 with a headline package of about Rs 20 lakh crore, roughly 10% of GDP, resting on five pillars — economy, infrastructure, technology-driven system, vibrant demography and demand — with the Finance Minister detailing it in tranches from 13 May 2020.
• PIB, Ministry of Commerce & Industry, 2 August 2023 (a written reply in the Lok Sabha by the Minister of State, Shri Som Parkash): PLI schemes for 14 key sectors were announced with an outlay of Rs 1.97 lakh crore, over US$26 billion, 'to enhance India's Manufacturing capabilities and Exports', their purpose being 'to attract investments in key sectors and cutting-edge technology'.
• The 14 PLI sectors, vetted by NITI Aayog: mobile manufacturing and specified electronic components; key starting materials, drug intermediaries and APIs; medical devices; automobiles and auto components; pharmaceutical drugs; specialty steel; telecom and networking products; electronic and technology products; white goods (ACs and LEDs); food products; man-made-fibre and technical textiles; high-efficiency solar PV modules; advanced chemistry cell batteries; and drones and drone components.
• Reach into the small-firm economy: of 733 applications selected across the PLI schemes, 176 beneficiaries are MSMEs, in bulk drugs, medical devices, pharma, telecom, white goods, food processing, textiles and drones (PIB, 2 August 2023).
• The MSME limb of the May 2020 package replaced the old investment-only test with a composite investment-and-turnover definition applying alike to manufacturing and services, and the Emergency Credit Line Guarantee Scheme announced on 13 May 2020 carried about Rs 3 lakh crore of collateral-free loans backed by a full government guarantee.
• The investment limb liberalised rather than restricted foreign capital — the FDI ceiling in defence manufacturing was raised from 49% to 74% under the automatic route, which is why reading 'Atmanirbhar' as a bar on foreign investment is factually wrong.

• Reading 'self-reliance' as autarky and therefore rejecting any statement about foreign investment — the package raised the defence-manufacturing FDI cap to 74%
• Treating Atmanirbhar Bharat as a single scheme with a single budget line; it is an umbrella covering PLI, MSME credit, FDI relaxation and several sector packages
• Quoting the Rs 20 lakh crore headline as fresh budgetary spending — a large share of it was liquidity support, credit guarantees and earlier RBI measures, not fiscal outgo

BPSC asks umbrella programmes as two-statement objective sets built almost entirely from official descriptions, so the statements tend to be broad and true and the honest answer is usually 'both'. UPSC asks the same question shape — 'What is/are the purpose/purposes of…' — but plants exactly one statement that sounds like a plausible policy aim and is not one, as it did in 2016 by inserting FDI promotion into the purposes of the gold schemes. So with BPSC test the statements against the scheme's named instruments; with UPSC also ask which single aim has been smuggled in.

• practice — not a real PYQ

  The Production Linked Incentive (PLI) scheme, the principal manufacturing instrument under Atmanirbhar Bharat, pays incentives on the basis of

  • (a)capital investment made in a plant
  • (b)incremental sales of goods manufactured in India
  • (c)the number of workers employed
  • (d)export earnings repatriated in foreign exchange

  Answer(b) incremental sales of goods manufactured in India — the incentive is linked to output over a base year rather than to capital or employment, which is why it draws foreign as well as domestic manufacturers to produce inside India.

• practice — not a real PYQ

  Which of the following was NOT one of the five pillars of Atmanirbhar Bharat as announced in May 2020?

  • (a)Economy
  • (b)Infrastructure
  • (c)Vibrant demography
  • (d)Import substitution through higher tariffs

  Answer(d) Import substitution through higher tariffs — the five pillars announced on 12 May 2020 were economy, infrastructure, technology-driven system, vibrant demography and demand.