UPSC Prelims Practice Questions — Cabinet approves Scheme for Promotion of Surface Coal/Lignite Gasification Projects with a financial outlay of Rs.37,500 crore

Q1. With reference to the Scheme for Promotion of Surface Coal/Lignite Gasification Projects approved by the Union Cabinet in May 2026 compared with the earlier coal/lignite gasification incentive scheme approved in January 2024, consider the following statements: 1. The 2024 scheme had a financial outlay of Rs.8,500 crore split into three categories, whereas the 2026 scheme has an outlay of Rs.37,500 crore exclusively for surface gasification. 2. Unlike the 2024 scheme which was administered by the Ministry of Coal, the 2026 scheme is administered by the Ministry of Petroleum and Natural Gas. 3. The 2026 scheme provides a financial incentive of a maximum of 20% of the cost of Plant and Machinery, disbursed in four equal milestone-linked instalments. Which of the statements given above is/are correct?

  1. The 2024 scheme had a financial outlay of Rs.8,500 crore split into three categories, whereas the 2026 scheme has an outlay of Rs.37,500 crore exclusively for surface gasification.
  2. Unlike the 2024 scheme which was administered by the Ministry of Coal, the 2026 scheme is administered by the Ministry of Petroleum and Natural Gas.
  3. The 2026 scheme provides a financial incentive of a maximum of 20% of the cost of Plant and Machinery, disbursed in four equal milestone-linked instalments.
  • A. 1 and 2 only
  • B. 1 and 3 only
  • C. 2 and 3 only
  • D. 1, 2 and 3

Q2. With reference to the Scheme for Promotion of Surface Coal/Lignite Gasification Projects (2026), consider the following features as approved by the Union Cabinet: 1. Maximum financial incentive cap per single project: Rs.5,000 crore. 2. Maximum financial incentive cap per single product (other than Synthetic Natural Gas and Urea): Rs.9,000 crore. 3. Maximum financial incentive cap per single entity group across all projects: Rs.15,000 crore. 4. Targeted gasification of coal/lignite under the scheme: approximately 75 Million Tonnes. Which of the above is/are NOT correctly stated?

  1. Maximum financial incentive cap per single project: Rs.5,000 crore.
  2. Maximum financial incentive cap per single product (other than Synthetic Natural Gas and Urea): Rs.9,000 crore.
  3. Maximum financial incentive cap per single entity group across all projects: Rs.15,000 crore.
  4. Targeted gasification of coal/lignite under the scheme: approximately 75 Million Tonnes.
  • A. 1 and 3
  • B. 2 and 4
  • C. 1, 2 and 4
  • D. 3 only

Q3. With reference to the Scheme for promotion of Coal/Lignite Gasification Projects approved by the Union Cabinet in 2024 (outlay Rs.8,500 crore), consider the following statements: 1. Category I exclusively supports Government PSUs and has an outlay of Rs.4,050 crore. 2. Category II is reserved for the private sector only and excludes Government PSUs. 3. Category III, with an outlay of Rs.600 crore, supports demonstration projects based on indigenous technology and small-scale gasification plants. 4. The Coal Gasification Plant Development and Production Agreement (CGPDPA) was signed by the Ministry of Coal with selected applicants under Category III. Which of the statements given above are correct?

  1. Category I exclusively supports Government PSUs and has an outlay of Rs.4,050 crore.
  2. Category II is reserved for the private sector only and excludes Government PSUs.
  3. Category III, with an outlay of Rs.600 crore, supports demonstration projects based on indigenous technology and small-scale gasification plants.
  4. The Coal Gasification Plant Development and Production Agreement (CGPDPA) was signed by the Ministry of Coal with selected applicants under Category III.
  • A. 1 and 3 only
  • B. 2 and 4 only
  • C. 1, 2 and 3 only
  • D. 3 and 4 only

Q4. Under Category I of the 2024 Rs.8,500 crore Scheme for promotion of Coal/Lignite Gasification Projects, up to how many Government PSU projects were envisaged to be supported through a lump-sum grant?

  • A. Two
  • B. Three
  • C. Four
  • D. Five

Q5. The 2026 'Scheme for Promotion of Surface Coal/Lignite Gasification Projects' (outlay Rs.37,500 crore), which advances the national target of gasifying 100 MT of coal by 2030, is implemented by which one of the following ministries?

  • A. Ministry of Coal
  • B. Ministry of Petroleum and Natural Gas
  • C. Ministry of New and Renewable Energy
  • D. Ministry of Power

Q6. Alongside the 2026 surface coal/lignite gasification incentive scheme, the Government has extended the coal linkage tenure under the 'Production of Syngas leading to Coal Gasification' sub-sector up to a maximum of how many years?

  • A. 20 years
  • B. 25 years
  • C. 30 years
  • D. 50 years

Q7. The Scheme for Promotion of Surface Coal/Lignite Gasification Projects (2026), with an outlay of Rs.37,500 crore, is implemented by which one of the following Union Ministries?

  • A. Ministry of Petroleum and Natural Gas
  • B. Ministry of Coal
  • C. Ministry of Power
  • D. Ministry of Chemicals and Fertilizers

Q8. Among the following imported energy/chemical feedstocks that the Scheme for Promotion of Surface Coal/Lignite Gasification Projects (2026) aims to substitute, which one does India import in the highest proportion of its domestic requirement?

  • A. Liquefied Natural Gas (LNG)
  • B. Urea
  • C. Methanol
  • D. Ammonia

Q9. With reference to the Scheme for Promotion of Surface Coal/Lignite Gasification Projects approved by the Union Cabinet in 2026, consider the following statements comparing it with the earlier coal gasification incentive scheme approved in January 2024: 1. The financial outlay of the 2026 scheme is more than four times that of the 2024 scheme. 2. Unlike the 2024 scheme which was structured under three project categories, the 2026 scheme is dedicated specifically to surface coal/lignite gasification. 3. The 2026 scheme caps the incentive available to a single gasification project at Rs.9,000 crore. Which of the statements given above is/are correct?

  1. The financial outlay of the 2026 scheme is more than four times that of the 2024 scheme.
  2. Unlike the 2024 scheme which was structured under three project categories, the 2026 scheme is dedicated specifically to surface coal/lignite gasification.
  3. The 2026 scheme caps the incentive available to a single gasification project at Rs.9,000 crore.
  • A. 1 and 2 only
  • B. 2 and 3 only
  • C. 1 and 3 only
  • D. 1, 2 and 3

Q10. Which one of the following Indian states holds the largest geological reserves of lignite as per the latest official estimates?

  • A. Rajasthan
  • B. Gujarat
  • C. Tamil Nadu
  • D. Jammu and Kashmir

Q11. In the context of India's coal sector, the term 'lignite' is most accurately described as which one of the following?

  • A. A low-rank brownish-black coal with high moisture and volatile matter, intermediate between peat and sub-bituminous coal
  • B. The highest-rank metamorphic coal with greater than 90% fixed carbon, used exclusively in metallurgical processes
  • C. A bituminous coal variety distinguished solely by its low ash content and exclusively used for coking in steel plants
  • D. A synthetic gaseous fuel derived from the surface gasification of coal in the presence of steam and oxygen

Q12. As per the rationale of the Scheme for Promotion of Surface Coal/Lignite Gasification Projects, which one of the following downstream products that coal-gasification-based syngas can substitute has the highest import dependence for India?

  • A. Methanol
  • B. Urea
  • C. Liquefied Natural Gas (LNG)
  • D. Ammonia

Q13. With reference to coal gasification technologies and related policy in India, consider the following statements: 1. Underground Coal Gasification (UCG) converts coal into syngas in-situ within the coal seam, without the need for conventional mining. 2. India's Underground Coal Gasification Policy was notified by the Ministry of Coal in 2016. 3. The Cabinet-approved Rs.37,500 crore (2026) scheme covers both surface gasification and underground (in-situ) gasification projects. 4. The 14th round of commercial coal mine auctions, launched in 2025, was the first to integrate UCG provisions into Coal Mine Development and Production Agreements. Which of the statements given above is/are NOT correct?

  1. Underground Coal Gasification (UCG) converts coal into syngas in-situ within the coal seam, without the need for conventional mining.
  2. India's Underground Coal Gasification Policy was notified by the Ministry of Coal in 2016.
  3. The Cabinet-approved Rs.37,500 crore (2026) scheme covers both surface gasification and underground (in-situ) gasification projects.
  4. The 14th round of commercial coal mine auctions, launched in 2025, was the first to integrate UCG provisions into Coal Mine Development and Production Agreements.
  • A. 1 and 2 only
  • B. 3 only
  • C. 2 and 4 only
  • D. 1, 2 and 4

Q14. With reference to the Scheme for Promotion of Surface Coal/Lignite Gasification Projects approved by the Union Cabinet in 2026, consider the following statements: 1. The financial incentive under the scheme is provided at a maximum of 20% of the cost of Plant and Machinery. 2. The scheme targets gasification of approximately 75 Million Tonnes of coal/lignite. 3. The scheme is implemented by the Ministry of Petroleum and Natural Gas. 4. The incentive ceiling for any single entity group across all its projects is Rs.5,000 crore. Which of the statements given above is/are correct?

  1. The financial incentive under the scheme is provided at a maximum of 20% of the cost of Plant and Machinery.
  2. The scheme targets gasification of approximately 75 Million Tonnes of coal/lignite.
  3. The scheme is implemented by the Ministry of Petroleum and Natural Gas.
  4. The incentive ceiling for any single entity group across all its projects is Rs.5,000 crore.
  • A. 1 and 2 only
  • B. 2 and 3 only
  • C. 1, 3 and 4
  • D. 3 and 4 only