MCQ-LICENSING OF INDUSTRIES AND REGULATION OF INDUSTRIAL ACTIVITIES UNDER VARIOUS INDUSTRIAL LICENSING LAWS
1. What is the primary legislation governing industrial licensing in India?
a) The Companies Act, 2013
b) The Industrial Disputes Act, 1947
c) The Industries (Development and Regulation) Act, 1951
d) The Competition Act, 2002
Answer: c) The Industries (Development and Regulation) Act, 1951
2. Which authority is responsible for granting industrial licenses in India?
a) Ministry of Finance
b) Ministry of Corporate Affairs
c) Department for Promotion of Industry and Internal Trade (DPIIT)
d) Reserve Bank of India
Answer: c) Department for Promotion of Industry and Internal Trade (DPIIT)
3. Under which act is the concept of Small Scale Industries (SSI) protected in terms of licensing?
a) The Factories Act, 1948
b) The Industrial Employment (Standing Orders) Act, 1946
c) The Micro, Small and Medium Enterprises Development (MSMED) Act, 2006
d) The Environmental Protection Act, 1986
Answer: c) The Micro, Small and Medium Enterprises Development (MSMED) Act, 2006
4. Which of the following is not a requirement for obtaining an industrial license in India?
a) Submission of a project report
b) Approval from the Ministry of Home Affairs
c) Land ownership proof
d) Environmental clearance
Answer: b) Approval from the Ministry of Home Affairs
5. For which of the following industries is industrial licensing not required?
a) Alcohol
b) Hazardous chemicals
c) Tobacco
d) Information Technology
Answer: d) Information Technology
6. What is the validity period of an industrial license once issued?
a) 2 years
b) 3 years
c) 4 years
d) 5 years
Answer: d) 5 years
7. Which sector’s licensing is regulated by the Ministry of Environment, Forest and Climate Change?
a) Pharmaceuticals
b) Mining
c) Textiles
d) Automobiles
Answer: b) Mining
8. Which document must be submitted to demonstrate compliance with environmental norms for an industrial license?
a) Fire safety certificate
b) Environmental Impact Assessment (EIA) report
c) Factory layout plan
d) Certificate of incorporation
Answer: b) Environmental Impact Assessment (EIA) report
9. What action can be taken if an industry is operating without the necessary industrial license?
a) Imposition of fines
b) Sealing of premises
c) Both a and b
d) Issuance of a warning
Answer: c) Both a and b
10. In which case is a prior approval from the Foreign Investment Promotion Board (FIPB) required?
a) When the investment is less than 100 crore INR
b) For all foreign investments
c) When the foreign investment is in a restricted sector
d) When the foreign investment is more than 500 crore INR
Answer: c) When the foreign investment is in a restricted sector
11. Which of the following is a non-scheduled industry under the IDRA Act, 1951?
a) Fertilizers
b) Automobiles
c) Textiles
d) IT services
Answer: d) IT services
12. What is the purpose of the National Industrial Corridor Development Programme?
a) To provide loans to small industries
b) To develop world-class infrastructure
c) To regulate hazardous industries
d) To control foreign investments
Answer: b) To develop world-class infrastructure
13. Which form is used for applying for an industrial license in India?
a) Form 1
b) Form A
c) Form IL
d) Form X
Answer: c) Form IL
14. Which ministry handles the licensing for the pharmaceutical industry in India?
a) Ministry of Chemicals and Fertilizers
b) Ministry of Health and Family Welfare
c) Ministry of Environment, Forest and Climate Change
d) Ministry of Science and Technology
Answer: a) Ministry of Chemicals and Fertilizers
15. What is the primary objective of the Make in India initiative?
a) To reduce exports
b) To increase foreign aid
c) To encourage domestic manufacturing
d) To improve international relations
Answer: c) To encourage domestic manufacturing
16. Which document outlines the detailed project proposal for obtaining an industrial license?
a) Feasibility report
b) Detailed Project Report (DPR)
c) Annual Report
d) Audit Report
Answer: b) Detailed Project Report (DPR)
17. What is the term used for the system that classifies industries based on their potential environmental impact in India?
a) Environmental Grading System
b) Industrial Impact System
c) Green Rating System
d) Environmental Clearance System
Answer: d) Environmental Clearance System
18. Which of the following is a requirement for obtaining an industrial license for a hazardous industry?
a) NOC from local municipal authorities
b) Approval from the Ministry of Labor
c) Clearance from the Central Pollution Control Board (CPCB)
d) Insurance policy
Answer: c) Clearance from the Central Pollution Control Board (CPCB)
19. What is the key focus of the National Manufacturing Policy (NMP)?
a) Reducing import tariffs
b) Promoting green technologies
c) Enhancing manufacturing sector growth
d) Supporting service industries
Answer: c) Enhancing manufacturing sector growth
20. Which document provides evidence of financial capacity for setting up an industry?
a) Bank guarantee
b) Financial statement
c) Investment certificate
d) Income tax return
Answer: b) Financial statement
21. Which of the following industries requires a compulsory license under the IDRA Act, 1951?
a) Handloom
b) Small-scale food processing
c) Large-scale manufacturing of hazardous chemicals
d) Retail
Answer: c) Large-scale manufacturing of hazardous chemicals
22. The National Investment and Manufacturing Zones (NIMZs) are a part of which initiative?
a) Digital India
b) Startup India
c) Make in India
d) Skill India
Answer: c) Make in India
23. What is the process called when an industry seeks to renew its industrial license?
a) Re-licensing
b) License extension
c) License renewal
d) License replication
Answer: c) License renewal
24. Which of the following is a criterion for classifying industries under the environmental clearance process?
a) Annual turnover
b) Number of employees
c) Investment in plant and machinery
d) Pollution potential
Answer: d) Pollution potential
25. What is the term for the official permission granted to an industry to commence operations?
a) Permit
b) License
c) Authorization
d) Certification
Answer: b) License
26. Which document is essential for obtaining an industrial license in an environmentally sensitive area?
a) Local government approval
b) Environmental Management Plan (EMP)
c) Trade license
d) GST registration
Answer: b) Environmental Management Plan (EMP)
27. Under the IDRA Act, 1951, which of the following is NOT a scheduled industry?
a) Sugar
b) Cement
c) Automobiles
d) Tourism
Answer: d) Tourism
28. Who is responsible for the implementation of the industrial policy in India?
a) Ministry of Finance
b) Ministry of Corporate Affairs
c) Ministry of Commerce and Industry
d) Ministry of External Affairs
Answer: c) Ministry of Commerce and Industry
29. What is the main purpose of the Factories Act, 1948, in relation to industrial licensing?
a) To regulate working hours
b) To ensure safe working conditions
c) To manage industrial disputes
d) To promote exports
Answer: b) To ensure safe working conditions
30. What type of industries requires clearance from the Directorate General of Civil Aviation (DGCA) in India?
a) Pharmaceuticals
b) Aerospace and defense
c) Food processing
d) Textiles
Answer: b) Aerospace and defense
31. Which Indian state has a single-window clearance system for industrial licensing to ease the process?
a) Maharashtra
b) Tamil Nadu
c) Karnataka
d) All of the above
Answer: d) All of the above
32. Which entity is responsible for the regulation of industries in Special Economic Zones (SEZs) in India?
a) Ministry of Commerce
b) SEZ Authority
c) Reserve Bank of India
d) Ministry of Finance
Answer: b) SEZ Authority
33. What does the term “greenfield project” refer to in the context of industrial licensing?
a) Expansion of existing industries
b) Setting up a new industry from scratch
c) Conversion of agricultural land to industrial land
d) Mergers and acquisitions
Answer: b) Setting up a new industry from scratch
34. Which act regulates the licensing of industries engaged in the production of explosives in India?
a) The Arms Act, 1959
b) The Explosive Substances Act, 1908
c) The Explosives Act, 1884
d) The Defense of India Act, 1915
Answer: c) The Explosives Act, 1884
35. What is the purpose of the “Minimum Alternative Tax” (MAT) in relation to industrial operations?
a) To tax companies avoiding regular tax
b) To provide tax benefits for startups
c) To reduce import duties
d) To subsidize export-oriented units
Answer: a) To tax companies avoiding regular tax
36. Which sector is exempt from industrial licensing under the New Industrial Policy of 1991?
a) Arms and ammunition
b) Atomic energy
c) Coal and lignite
d) Electronics
Answer: d) Electronics
37. Which act governs the establishment and regulation of Special Economic Zones (SEZs) in India?
a) SEZ Act, 2005
b) SEZ Act, 2002
c) SEZ Act, 2001
d) SEZ Act, 1999
Answer: a) SEZ Act, 2005
38. What is the main objective of the “Startup India” initiative?
a) To boost the IT industry
b) To promote innovation and entrepreneurship
c) To increase foreign direct investment
d) To regulate small-scale industries
Answer: b) To promote innovation and entrepreneurship
39. Which document is required for establishing a foreign-owned manufacturing unit in India?
a) Trade license
b) Foreign Investment Facilitation Portal (FIFP) approval
c) Pollution control certificate
d) Income tax clearance
Answer: b) Foreign Investment Facilitation Portal (FIFP) approval
40. Which body is responsible for the environmental regulation of industrial activities in India?
a) Ministry of Corporate Affairs
b) National Green Tribunal (NGT)
c) Central Pollution Control Board (CPCB)
d) Bureau of Indian Standards (BIS)
Answer: c) Central Pollution Control Board (CPCB)
41. What does the term “brownfield project” refer to in the context of industrial licensing?
a) Setting up a new industry from scratch
b) Expansion of existing industries
c) Industrial projects in rural areas
d) Conversion of residential land to industrial land
Answer: b) Expansion of existing industries
42. Under the IDRA Act, 1951, who has the authority to make rules for the regulation of industrial undertakings?
a) State governments
b) Ministry of Corporate Affairs
c) Ministry of Finance
d) Central government
Answer: d) Central government
43. What is the role of the Industrial Licensing Committee (ILC)?
a) To monitor industrial production
b) To issue and regulate industrial licenses
c) To provide financial assistance to industries
d) To oversee labor laws compliance
Answer: b) To issue and regulate industrial licenses
44. Which policy initiative focuses on promoting the use of renewable energy in industrial sectors?
a) National Energy Policy
b) National Solar Mission
c) National Industrial Policy
d) National Green Tribunal Act
Answer: b) National Solar Mission
45. What is required for an industry to obtain a license in a restricted zone?
a) Local municipal corporation approval
b) Zonal development authority clearance
c) Regional transport office (RTO) approval
d) National Green Tribunal (NGT) clearance
Answer: b) Zonal development authority clearance
46. Which type of industries is subject to location-specific restrictions in India?
a) Food processing
b) IT services
c) Chemical manufacturing
d) Textile production
Answer: c) Chemical manufacturing
47. Which initiative was launched to create a robust manufacturing sector by reducing regulatory complexities?
a) Startup India
b) Digital India
c) Make in India
d) Skill India
Answer: c) Make in India
48. What is the term used for industries that do not require an industrial license to operate?
a) Unregulated industries
b) Delicensed industries
c) Free trade industries
d) Liberalized industries
Answer: b) Delicensed industries
49. Which ministry is responsible for regulating the mining sector in India?
a) Ministry of Corporate Affairs
b) Ministry of Finance
c) Ministry of Mines
d) Ministry of Commerce and Industry
Answer: c) Ministry of Mines
50. What is the key focus of the Ease of Doing Business initiative in India?
a) Simplifying the process of obtaining industrial licenses
b) Increasing import duties
c) Promoting government-owned enterprises
d) Reducing foreign direct investment
Answer: a) Simplifying the process of obtaining industrial licenses
