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

Question

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
Out of these :

UnlockIAS · Accepted Answer

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.

Why the other options are wrong — (a) 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) 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) 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.

Concept: 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.

State PCS 2025 Q67 — Economy PYQ with Answer

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