Updated for 2026 Syllabus Detailed Explanations High-Yield Core Concepts

Bank Promotion Exam Guide

Banking Awareness | Banking Knowledge | for all Bank Exams

Module: General Practice

Q140: Clusters are broadly classified into "Natural" and "Induced" clusters. Which of the following is a defining characteristic of a "Natural Cluster"?

A
It is created artificially by the government through land allotment in a new Industrial Park.
B
It evolves organically over decades due to factors like raw material availability or traditional skills.
C
It is formed solely by a large anchor industry inviting its vendors to a specific location.
D
It typically lacks any social homogeneity or common cultural identity among the workforce.
✅ Correct Answer: B
Concept Definition:
Natural Clusters: These evolve spontaneously over time without deliberate government planning.
They emerge due to advantages like proximity to raw materials, availability of specific traditional skills (for example, the Artisan clusters of Jaipur), or market access.
Induced Clusters: These are planned and set up by policy intervention, such as establishing an Industrial Estate or Special Economic Zone (SEZ), where the government provides infrastructure to attract units.
Key Difference: Natural clusters have deep social and historical roots, often described as "organic growth," whereas Induced clusters are "engineered" for economic reasons.