The Atmanirbhar Bharat Scheme announced by the Government helps in: 1. Enhancing India’s manufacturing capabilities and exports across the industries 2. Incentivizing foreign investments for domestic production Select the answer using the code given below:
- (a)1 only
- (b)2 only
- (c)Both 1 and 2
- (d)Neither 1 nor 2
Correct — C, Both 1 and 2. Atmanirbhar Bharat was announced in May 2020 as a package of relief and reform measures, and self-reliance was defined from the start as producing more in India and selling more from India, not as closing the economy. Statement 1 matches its central industrial instrument, the production-linked incentive schemes, which pay manufacturers a percentage of incremental sales of goods made in India across sectors from electronics and pharmaceuticals to white goods, textiles and food processing, with exports explicitly among the aims. Statement 2 matches the investment side of the same programme: foreign direct investment caps were raised in defence manufacturing, the automatic route was widened in several sectors, and the incentives were open to foreign as well as Indian firms setting up production here. The package also carried credit guarantees for small firms, farm-market reforms and public-sector policy changes.
- (a)1 only — Leaves out foreign investment, but attracting overseas manufacturers to produce in India was a stated aim, and the incentive schemes were open to them.
- (b)2 only — Leaves out the manufacturing and export objective, which is the core of the production-linked incentive design.
- (d)Neither 1 nor 2 — Reads self-reliance as autarky. The programme's own framing was greater domestic production integrated with global supply chains.
Atmanirbhar Bharat Abhiyan was announced in May 2020 with a headline package equal to about a tenth of GDP, combining liquidity support, credit guarantees and structural reform. Its industrial core is the production-linked incentive scheme family, under which a firm receives an incentive calculated on incremental sales of goods manufactured in India over a base year, sector by sector. The stated aims are scale in domestic manufacturing, a larger share in global supply chains, and higher exports.
The trap is the word self-reliance, which invites the reading that the scheme was protectionist and therefore hostile to foreign investment. The policy record says otherwise: caps were raised and routes eased, and foreign firms are among the largest beneficiaries of the incentive schemes, notably in mobile phone assembly. Once that is clear, both statements read as plain description and the answer is 'both'. As of the September 2024 exam the incentive schemes were running across fourteen sectors; the programme has since been reviewed sector by sector, with performance uneven across them.
- Atmanirbhar Bharat Abhiyan was announced in May 2020; the headline package was about ₹20 lakh crore.
- Production-linked incentive schemes pay on incremental sales of goods manufactured in India, sector by sector, and were extended to fourteen sectors.
- Mobile phone manufacturing and pharmaceuticals are the sectors most often cited for export gains under the scheme.
- The package raised the foreign direct investment cap in defence manufacturing under the automatic route from 49 to 74 per cent.
- Equating self-reliance with import substitution or with discouraging foreign investment.
- Assuming the package was only fiscal spending; a large part of it was credit guarantees and liquidity support.
- Confusing the incentive schemes with subsidies on inputs — they are paid on incremental sales, not on production costs.
As a two-statement item on what a flagship scheme does, or as a single-answer question on which sector received a named incentive scheme.
No directly related past PYQ was found.
- practice — not a real PYQ
Under a production-linked incentive scheme, the incentive is paid on
- (a)incremental sales of goods manufactured in India over a base year
- (b)the value of imported components used
- (c)the number of workers employed
- (d)the land purchased for the factory
Answer(a) incremental sales of goods manufactured in India over a base year — the design rewards additional domestic output, not inputs or employment directly.
- practice — not a real PYQ
The Atmanirbhar Bharat package raised the foreign direct investment cap under the automatic route in which sector to 74 per cent?
- (a)Insurance
- (b)Defence manufacturing
- (c)Multi-brand retail
- (d)Atomic energy
Answer(b) Defence manufacturing — the cap under the automatic route was raised from 49 to 74 per cent as part of the package.