Industry, MSME and Infrastructure Economics

• Option (b) is correct on the position obtaining when the paper was set. The Index of Eight Core Industries covers coal, crude oil, natural gas, refinery products, fertilizers, steel, cement and electricity, and at the 2004-05 base these eight carried a combined weight of 37.90 percent in the Index of Industrial Production. Within that, electricity carried the largest weight at 10.32, followed by steel at 6.68, refinery products at 5.94, crude oil at 5.22, coal at 4.38, cement at 2.41, natural gas at 1.71 and fertilizers at 1.25.
• Option (d) is the runner up and the intended trap, steel being second.
• Options (a) and (c) are well down the order, fertilizers carrying the smallest weight of all eight. The elimination route is that electricity is the universal intermediate input, consumed by every other core industry, so its share of industrial value is necessarily the largest.

• Statement 1 is incorrect. The National Investment and Infrastructure Fund is not an organ of NITI Aayog and has no relationship with it. It was created by the Government of India as a fund of funds registered with SEBI as a Category II Alternative Investment Fund, anchored by the Department of Economic Affairs in the Ministry of Finance, with the Government holding a forty nine per cent stake and the balance raised from domestic and foreign institutional investors including sovereign wealth funds and pension funds. NITI Aayog is a policy think tank with no investment vehicle under it, and the statement trades on the loose association between NITI Aayog and anything described as national planning or investment.
• Statement 2 is incorrect on the figure. The corpus was fixed at about forty thousand crore rupees, with the Government contributing up to twenty thousand crore, that is, half; the figure of four lakh crore overstates it tenfold. Both statements failing, the official answer (d) follows. Elimination is available to a candidate who knows only that the Fund sits under the Ministry of Finance, since rejecting statement 1 removes (a) and (c) at once. Governing principle for fund and corpus items: the order of magnitude is usually the safer test, an inflated figure being a more common device than a subtly wrong one.

• Statement 1 is correct. Nationalisation proceeded in two stages under Indira Gandhi, coking coal mines being taken over in 1971 and 1972 and non coking coal mines in 1973 under the Coal Mines (Nationalisation) Act, 1973, with Coal India Limited formed in 1975 as the holding company.
• Statement 2 is incorrect. Allocation by discretionary screening committee was held illegal and the allocations cancelled by the Supreme Court in 2014, after which the Coal Mines (Special Provisions) Act, 2015 and the Mines and Minerals (Development and Regulation) Amendment Act, 2015 established competitive auction and, for public sector entities, allotment. Lottery has never been the method.
• Statement 3 is incorrect. India remains among the largest coal importers in the world, importing coking coal for steel because domestic reserves are largely of poor coking quality, and thermal coal for coastal power stations designed for imported grades. Self sufficiency in coal is a policy target, not an achieved position. Since only statement 1 holds, the official answer (a) follows. The elimination route is quick, since the word lottery in statement 2 is implausible on its face for a mineral allocation regime, and the coal import position is common knowledge, so both distractors fall without specialist recall.

• Statement 1 is incorrect. The PNGRB was constituted in 2006 under the Petroleum and Natural Gas Regulatory Board Act of that year, long after several other regulators, among them the Securities and Exchange Board of India given statutory status in 1992, the Telecom Regulatory Authority of India in 1997, the Insurance Regulatory and Development Authority in 1999 and the Central Electricity Regulatory Commission in 1998. It is neither the first regulator nor close to it.
• Statement 2 is correct. The Act charges the Board with protecting the interests of consumers and entities, ensuring uninterrupted and adequate supply of petroleum, petroleum products and natural gas in all parts of the country, and promoting competitive markets, and the authorisation of city gas distribution networks and the regulation of common carrier pipeline access are the instruments through which it does so.
• Statement 3 is correct. Appeals against orders of the Board lie to the Appellate Tribunal for Electricity, which was constituted under the Electricity Act, 2003 and has been given appellate jurisdiction over the petroleum and gas regulator as well, an arrangement that avoids proliferating tribunals across the energy sector. Since statements 2 and 3 hold, the official answer (b) follows.
• Statement 1 is the eliminator and is disposed of by any one earlier regulator, which removes options (a), (c) and (d) at a stroke.

The Coal Controller's Organization is a subordinate office of the Ministry of Coal whose functions derive largely from the Colliery Control Order and the Coal Bearing Areas Acquisition and Development Act.

• Item 1 is correct: it compiles and publishes coal statistics and is the principal official source for them.
• Item 2 is correct: monitoring the progress of development of captive coal and lignite blocks falls within its charge.
• Item 3 is correct and is its statutory quasi judicial function, the Coal Controller being the authority before whom objections to a government notification for the acquisition of coal bearing areas are heard.
• Item 4 is incorrect. Ensuring that mining companies deliver coal to end users within a prescribed time is a matter of the commercial contracts between producers and consumers, chiefly the fuel supply agreements, and of the linkage and logistics arrangements overseen elsewhere; it is not a function of the Coal Controller.
• Items 1, 2 and 3 holding, (a) is correct, and options (b), (c) and (d) each either admit the delivery function or drop the statutory objection hearing.

• Statement 1 is incorrect on any version of the definition. Under the MSMED Act as originally enacted in 2006, a medium manufacturing enterprise was one with investment in plant and machinery above five crore rupees and up to ten crore rupees. Under the revised composite criterion notified in 2020, a medium enterprise is one with investment up to fifty crore rupees and turnover up to two hundred and fifty crore rupees. The band of fifteen to twenty five crore rupees corresponds to neither.
• Statement 2 is correct. Under the Reserve Bank's priority sector lending guidelines, all bank loans to micro, small and medium enterprises qualify for priority sector classification, with sub targets prescribed for micro enterprises within the overall requirement. Only statement 2 stands, giving (b).

• Statement 1 is correct. The Companies (Corporate Social Responsibility Policy) Rules exclude from CSR any activity that benefits only the employees of the company and their families, and activities undertaken in the normal course of business, precisely so that CSR spending is directed outward to society rather than recovered internally.
• Statement 2 is incorrect. Section 135 of the Companies Act 2013 requires qualifying companies, those meeting the thresholds on net worth, turnover or net profit, to spend at least two per cent of the average net profits of the three immediately preceding financial years on CSR, and the 2021 amendments made this enforceable with penalty and transfer of unspent amounts to specified funds. Hence 1 only, which is (a).
• Options (b) and (c) require the false claim that no minimum is specified, and (d) wrongly rejects the true exclusion rule.

Only statement 2 is correct, so (b) is the answer. M1xchange is one of the platforms licensed by the Reserve Bank under the Trade Receivables Discounting System, and its function is to let a micro, small or medium supplier auction an accepted invoice or bill of exchange drawn on a large buyer, with financiers bidding to purchase the receivable, so that the supplier is paid at once rather than after the credit period.

• Statement 1 is wrong, and it is wrong precisely because it inverts the purpose of such a platform. The whole design addresses the inability of small suppliers to offer collateral, by shifting the credit assessment onto the buyer whose obligation is being discounted, so the financing is without recourse to the seller and without collateral.
• Statement 3 is wrong because a receivables exchange is a transaction platform and not a rating agency, and credit rating is a separately registered activity under the securities regulator. (a) and (d) accept the collateral claim and (a) and (c) accept the rating claim.