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Production Linked Incentive (PLI) Scheme – Economic Survey 2025-26 MCQ - Practice Questions with Answers

Solve 5 Production Linked Incentive (PLI) Scheme – Economic Survey 2025-26 questions for RAS/RPSC preparation.

Practice questions

Q1Which one of the following correctly describes the basic design of the PLI incentive?

A An unconditional grant paid before a firm begins production
B A reimbursement based only on the purchase price of new machinery
C A percentage of eligible incremental sales or production over a fixed base year, subject to sector-specific conditions
D A permanent tax holiday available uniformly to every manufacturing sector
Explanation

PLI ties government support to measurable performance. An eligible firm receives a prescribed percentage of incremental sales or production above a fixed base year, while minimum investment, value-addition requirements, ceilings and incentive windows vary across sector schemes.

Q2Which institution performs nodal coordination of the Production Linked Incentive (PLI) framework?

A NITI Aayog
B Department for Promotion of Industry and Internal Trade (DPIIT)
C Department of Economic Affairs
D Ministry of Micro, Small and Medium Enterprises
Explanation

DPIIT, under the Ministry of Commerce and Industry, provides nodal coordination for the PLI framework. Implementation is decentralized: the concerned ministry or department notifies and runs the scheme for its own sector, such as MeitY for electronics.

Q3Consider the following statements about the PLI framework: 1. The first PLI scheme for large-scale electronics was notified on 1 April 2020. 2. Drones and drone components were added in September 2021, completing the 14-sector framework. 3. High-efficiency solar PV modules and ACC batteries are included among the 14 sectors. 4. Every sector scheme uses the same base year, investment threshold and incentive window. Which of the statements are correct?

A 1 and 2 only
B 1, 2 and 3 only
C 2, 3 and 4 only
D 1, 2, 3 and 4
Explanation

Statements 1, 2 and 3 are explicit features of the framework: the electronics scheme was notified on 1 April 2020, drones completed the 14-sector coverage in September 2021, and solar PV plus ACC batteries are listed sectors. Statement 4 is false because sector schemes set their own parameters.

Q4Consider the following two statements about outcomes in PLI-supported sectors: Statement 1: Electronics production increased from ₹2.13 lakh crore in FY 2020-21 to ₹5.25 lakh crore in FY 2024-25, a rise of 146%. Statement 2: PLI-covered bulk drugs moved from a ₹1,930 crore trade deficit in FY 2021-22 to a ₹2,280 crore surplus in FY 2024-25. Which option is correct?

A Both Statement 1 and Statement 2 are correct
B Only Statement 1 is correct
C Only Statement 2 is correct
D Neither Statement 1 nor Statement 2 is correct
Explanation

Both statements reproduce the reported sector results. Electronics output rose by ₹3.12 lakh crore between FY 2020-21 and FY 2024-25, corresponding to 146%. Over the same broad period, PLI-covered bulk drugs crossed from net-import deficit to net-export surplus.

Q5Match List I with List II and select the correct code. List I (sector): 1. Large-scale electronics; 2. Bulk drugs; 3. High-efficiency solar PV modules; 4. Automobiles and auto components. List II (reported feature): a. Nearly 48 GW of integrated module capacity being built; b. 19 AAT vehicle and 103 component categories; c. 146% production growth from FY 2020-21 to FY 2024-25; d. 83.7% domestic value addition.

A 1-d, 2-c, 3-b, 4-a
B 1-c, 2-a, 3-d, 4-b
C 1-a, 2-b, 3-c, 4-d
D 1-c, 2-d, 3-a, 4-b
Explanation

The correct mapping is 1-c, 2-d, 3-a, 4-b. Electronics recorded 146% production growth; bulk drugs reached 83.7% domestic value addition; solar PV is building nearly 48 GW; and the automobile incentive covers 19 AAT vehicle and 103 component categories.

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