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26 Jul 2026ECONOMY3 questions

Plug-and-Play for Chemicals: The ₹3,030-Crore Bet to Cut India's Import Bill

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Article summary

The Union Cabinet approved the Bharat Audyogik Vikas Yojana Rasayan, or BHAVYA-Rasayan, a scheme with an outlay of ₹3,030 crore to establish three dedicated chemical parks in India over five years from FY27 to FY31. Of the outlay, ₹3,000 crore is for common infrastructure and basic utilities inside the parks and ₹30 crore for administration, with the Centre providing a grant of up to ₹1,000 crore per park subject to a minimum contribution of ₹500 crore by the concerned State government. The parks are designed to offer plug-and-play infrastructure — shared facilities and utilities that a chemical unit can use without building its own — to lower the entry cost and risk of setting up in a capital-intensive, environmentally sensitive sector. The scheme targets a sector in which India runs a large trade deficit, importing chemicals it could produce domestically, and is framed as an import-substitution and manufacturing-competitiveness measure.

What this tests

recallTests whether you read the article and retained key facts.
1Q
applicationTests whether you can apply the concept to a new scenario.
1Q
analysisTests whether you can reason across multiple related facts.
1Q

Sample questions — answers revealed after test

ECONOMYRecallEasy

Q1. The chemical industry is often described as an 'intermediate' industry. What does this mean?

AIt produces only finished consumer goods sold directly to households.
BIts products are largely inputs to other industries — pharmaceuticals, textiles, agriculture, electronics — rather than final consumer goods.
CIt operates only at an intermediate scale, between small and large enterprises.
DIt is intermediate in age between traditional and modern manufacturing.
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ECONOMYApplicationMedium

Q2. The plug-and-play chemical-parks model is said to address a 'market failure'. Which one of the following best identifies that failure?

AThe tendency of chemical firms to collude on prices.
BThe under-provision of shared infrastructure — common effluent treatment, utilities, safety systems — that individual firms would each have to duplicate at high fixed cost.
CThe overproduction of chemicals beyond market demand.
DThe failure of consumers to demand enough chemical products.
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ECONOMYAnalysisHard

Q3. Consider the following statements about the BHAVYA-Rasayan scheme: 1. The Centre's grant of up to ₹1,000 crore per park is conditional on the concerned State contributing at least ₹500 crore. 2. By concentrating chemical units with shared, professionally run effluent treatment, a park can improve environmental compliance relative to dispersed units. 3. Import substitution in chemicals will succeed automatically once the parks are built, regardless of domestic production costs. Which of the statements given above are correct?

A1 and 2 only
B1 only
C2 and 3 only
D1, 2 and 3
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