UPSC Editorials Quiz : 4 October 2025

Solution: B

• Statement 1 is incorrect. The PRATIBHA Setu (Professional Resource And Talent Integration Bridge for Hiring Aspirants) initiative is not related to AI-based evaluation. Its purpose is to facilitate employment opportunities for those meritorious candidates who reach the interview stage of the examination but do not feature in the final merit list. The use of AI is a proposed future reform for enhancing efficiency, not a part of this specific initiative.
• Statement 2 is correct. The candidates for the mains examination have the option of writing their answers in English or any of the 22 languages recognised under the Constitution of India, which corresponds to the languages listed in the Eighth Schedule.
• Statement 3 is correct. As part of its reforms to adapt to modern challenges and maintain the integrity of its examinations, the UPSC has initiated the use of new face-recognition technology to ensure zero impersonation, thereby strengthening the fairness and security of the process.

Solution: B

• Statement 1 is correct. A large part of the MSME sector operates in the informal economy. These enterprises often do not maintain proper books of accounts or have a digital footprint. This lack of formal documentation creates ‘information asymmetry’, where lenders (banks) do not have reliable data to assess the financial health and credit risk of the MSME. This makes them hesitant to lend, especially without collateral, thus creating a major barrier to accessing formal finance. This has been a recurring theme in reports by the RBI and expert committees.
• Statement 2 is correct. Delayed payments are a perennial and critical problem for MSMEs. As suppliers to large corporations and government departments, they often face long delays in receiving payments for goods and services delivered. This severely disrupts their cash flow, locks up their working capital, and hampers their ability to take on new orders or even sustain operations. Despite legislative provisions like the MSMED Act, 2006, which mandates penalties for delayed payments, MSMEs often hesitate to invoke them for fear of losing business. The RBI has recognized this as a major challenge and has promoted platforms like TReDS (Trade Receivables Discounting System) to address it.
• Statement 3 is incorrect. MSMEs suffer from a lack of economies of scale, or “diseconomies of scale,” due to their small-scale operations. Economies of scale refer to the cost advantages that enterprises obtain due to their scale of operation, with cost per unit of output decreasing with increasing scale. Because MSMEs are small and often use low levels of technology, they cannot produce on a large scale and thus cannot benefit from these cost advantages. Their operations are typically labour-intensive, not capital-intensive.

Solution: B

• Statement 1 is incorrect. The PLI scheme is not limited to foreign companies. It is open to both domestic and foreign companies. The goal is to encourage manufacturing and investment in India, regardless of the origin of the company, as long as they meet the scheme’s criteria. It aims to create domestic champions as well as attract global players.
• Statement 2 is incorrect. The incentive under the PLI scheme is not linked to capital investment. It is linked to incremental sales of products manufactured in domestic units over a base year. This output-oriented approach ensures that incentives are given only for increased production and sales, making it a more performance-driven policy compared to earlier capital subsidy schemes.
• Statement 3 is correct. A primary objective of the PLI scheme is to overcome sectoral disabilities, achieve economies of scale, and make Indian manufacturing globally competitive. By creating a conducive manufacturing ecosystem, the government aims to nurture a few “global champions” in each approved sector that can compete with the best in the world. This is a move away from protecting weak firms towards promoting strong, efficient ones.
• Statement 4 is correct. The PLI scheme has been rolled out for 14 key sectors. This broad coverage reflects a strategic decision to boost manufacturing across various industries that are critical for growth, employment, and reducing import dependence. The sectors include mobile manufacturing, electronic components, pharmaceuticals, medical devices, automobiles and auto components, specialty steel, textiles (man-made fibres and technical textiles), and food products, among others.

Solution: A

• Statement 1 is correct. A major theme of the Companies (Amendment) Act, 2020, was the decriminalisation of several offences under the Act. The objective was to reduce the burden on the criminal justice system and special courts (NCLT) and to improve the ease of doing business. Minor, procedural, or technical lapses that did not involve fraud or larger public interest were reclassified from criminal offences (punishable with imprisonment) to civil wrongs, subject to monetary penalties through an in-house adjudication mechanism. This included defaults like delays in filing annual returns.
• Statement 2 is correct. The 2020 amendment introduced a new provision enabling the central government to make rules that would permit certain classes of Indian public companies to list their securities directly on stock exchanges in permissible foreign jurisdictions. This was a significant move aimed at providing Indian companies with access to a larger pool of global capital and a wider investor base, which was previously not allowed.
• Statement 3 is incorrect. The 2020 amendment did not make CSR voluntary. The mandatory nature of CSR spending, as strengthened by the 2019 amendment, was retained. The 2020 amendment made some procedural changes but did not alter the fundamental legal obligation for eligible companies to spend on CSR activities.

Solution: A

• Statement-I is correct. It accurately captures the ideological core of the 1991 reforms. The pre-1991 era was dominated by the principles of central planning, a dominant public sector, and import-substitution (inward-looking). The New Economic Policy (NEP) fundamentally altered this approach by placing greater reliance on market forces, encouraging private sector participation, and integrating the Indian economy with the global economy (outward-looking). This was a paradigm shift.
• Statement-II is correct. It lists some of the most critical policy measures undertaken as part of the NEP’s “Liberalisation” component. The Rupee was devalued to make Indian exports cheaper and imports more expensive, thereby addressing the immediate balance of payments issue. Import tariffs, which were among the highest in the world, were progressively reduced to expose domestic industry to competition and improve efficiency. The abolition of industrial licensing for most industries dismantled the ‘Licence Raj’ and gave significant freedom to private enterprises.
• Statement-II provides the concrete policy examples that constitute the paradigm shift described in Statement-I.