UPSC Prelims 2001 Q64: Indian Economy – Infrastructure & Industry
- (a) I, III and IV
- (b) I, II and IV
- (c) II, III and IV
- (d) II and III
Answer: (b) I, II and IV
Explanation
Factors that determine the nature and size of an industry
| Factor | In the published answer? |
|---|---|
| I. Capital investment | Yes |
| II. Business turnover | Yes |
| IV. Power consumption | Yes |
| III. Labour force | Not in the published answer |
Two published keys for this question give (b) I, II and IV: capital investment, business turnover and power consumption. Note that the question is open to debate: NCERT describes industry size in terms of capital invested, number of workers and volume of production, and the Factories Act, 1948 uses the number of workers. The answer here follows the published keys.
Answer: (b) I, II and IV.
Why each option is right or wrong
- (a) Incorrect. The published keys include business turnover and leave out labour force.
- (b) CORRECT. Capital investment, turnover and power consumption, as per the published keys.
- (c) Incorrect. Capital investment, a basic measure of size, is left out.
- (d) Incorrect. Capital investment and power consumption are left out.
Key point
MSME (2020): micro — investment up to Rs 2.5 crore and turnover up to Rs 10 crore; small — Rs 25 crore and Rs 100 crore; medium — Rs 125 crore and Rs 500 crore.
Remember
Published key: capital investment, turnover and power consumption.
Common mistakes
- Leaving out capital investment, the most common size measure.
- Treating every option as equally likely without checking published keys.
- Forgetting that turnover is used to size firms.
Exam tip
For classification questions, recall the official criteria: investment and turnover for MSMEs.
Sources
- Ministry of MSME — Notification S.O. 2119(E), 26 June 2020 (investment and turnover criteria)
- NCERT Class XII — Fundamentals of Human Geography, chapter 'Secondary Activities' (classification by size)