UPSC Prelims Practice Questions — Cabinet approves Price Stabilization Fund for Scheduled Indian Airlines towards ATF pricing

Q1. With reference to the Price Stabilization Fund for Scheduled Indian Airlines towards ATF pricing approved by the Union Cabinet in June 2026, and comparing it with the earlier Price Stabilisation Fund (PSF) of 2014-15, consider the following statements: 1. While the 2014-15 PSF for perishables was operated by the Department of Consumer Affairs, the 2026 ATF Price Stabilization Fund is routed through the Demands for Grants of the Ministry of Petroleum and Natural Gas. 2. The 2026 scheme provides a one-time budgetary support of up to Rs 10,000 crore in the form of interest-free advances to Oil Marketing Companies, and not as an outright subsidy. 3. Unlike the 2014-15 PSF which had an indefinite tenure, the 2026 ATF Price Stabilization Fund has a fixed duration of sixty months subject to biennial review. Which of the statements given above is/are correct?

  1. While the 2014-15 PSF for perishables was operated by the Department of Consumer Affairs, the 2026 ATF Price Stabilization Fund is routed through the Demands for Grants of the Ministry of Petroleum and Natural Gas.
  2. The 2026 scheme provides a one-time budgetary support of up to Rs 10,000 crore in the form of interest-free advances to Oil Marketing Companies, and not as an outright subsidy.
  3. Unlike the 2014-15 PSF which had an indefinite tenure, the 2026 ATF Price Stabilization Fund has a fixed duration of sixty months subject to biennial review.
  • A. 1 and 2 only
  • B. 2 and 3 only
  • C. 1 and 3 only
  • D. 1, 2 and 3

Q2. The Price Stabilization Fund for Scheduled Indian Airlines towards ATF pricing, approved by the Union Cabinet in June 2026, is operationalised by providing interest-free advances to Oil Marketing Companies exclusively through the Demands for Grants of which one of the following ministries?

  • A. Ministry of Civil Aviation
  • B. Ministry of Finance (Department of Expenditure)
  • C. Ministry of Petroleum and Natural Gas
  • D. Ministry of Consumer Affairs, Food and Public Distribution

Q3. With reference to the taxation of Aviation Turbine Fuel (ATF) vis-à-vis other petroleum products in India, consider the following statements:

  1. Aviation Turbine Fuel, along with petroleum crude and natural gas, falls within the constitutional ambit of the Goods and Services Tax under Article 279A, but its actual levy under GST requires a recommendation by the GST Council.
  2. Unlike commodities under the GST regime, the retail price of ATF at Indian airports is determined by Central Excise duty levied by the Union and Value Added Tax (VAT) levied by the State concerned.
  3. The Union Ministry of Civil Aviation has directed all States and Union Territories to fix a uniform VAT rate of 1 per cent on ATF across all airports in the country.
  • A. 1 and 2 only
  • B. 2 and 3 only
  • C. 1 and 3 only
  • D. 1, 2 and 3

Q4. The Price Stabilisation Fund (PSF), when originally constituted in 2014-15 as a Central Sector Scheme for market intervention in perishable agri-horticultural commodities, was set up exclusively under which one of the following?

  • A. Department of Consumer Affairs, Ministry of Consumer Affairs, Food and Public Distribution
  • B. Department of Agriculture and Cooperation, Ministry of Agriculture
  • C. Department of Food and Public Distribution, Ministry of Consumer Affairs, Food and Public Distribution
  • D. Department of Economic Affairs, Ministry of Finance

Q5. With reference to the Price Stabilisation Fund (PSF) set up in 2014-15 as a Central Sector Scheme, which of the following commodities were NOT among those originally covered for market intervention under the scheme?

  1. Onion
  2. Wheat
  3. Pulses
  4. Edible oils
  • A. 1 and 3
  • B. 2 and 4
  • C. 1, 2 and 4
  • D. 3 only

Q6. How many Public Sector Oil Marketing Companies (OMCs), under the administrative control of the Ministry of Petroleum and Natural Gas, supply Aviation Turbine Fuel (ATF) to Scheduled Indian Airlines?

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

Q7. Which one of the following is the largest Public Sector Oil Marketing Company in India and the lead Maharatna PSU supplying Aviation Turbine Fuel (ATF) to scheduled Indian airlines?

  • A. Bharat Petroleum Corporation Limited
  • B. Hindustan Petroleum Corporation Limited
  • C. Indian Oil Corporation Limited
  • D. Mangalore Refinery and Petrochemicals Limited

Q8. With reference to the measures announced by the Union Government in response to the West Asia crisis and its impact on India's petroleum and aviation sectors (as in 2026), which of the following is/are NOT among the announced measures?

  1. A one-time interest-free advance of up to ₹10,000 crore to Oil Marketing Companies to stabilise Aviation Turbine Fuel prices for Scheduled Indian Airlines.
  2. Imposition of an export levy on Aviation Turbine Fuel (ATF) and diesel to ensure their availability in the domestic market.
  3. Bringing Aviation Turbine Fuel (ATF) under the Goods and Services Tax (GST) regime to insulate carriers from State VAT shocks.
  4. A partial cap on the ATF price hike (limited to 25%) for the domestic operations of Indian carriers.
  • A. 3 only
  • B. 1 and 3
  • C. 2 and 4
  • D. 1, 2 and 4

Q9. With reference to India's energy-security position during the West Asia crisis (as articulated by the Government in 2026), which of the following statements is/are correct?

  1. At the time of the 5th Inter-Ministerial Group on West Asia, India had a rolling stock of approximately 60 days of crude oil and 45 days of LPG.
  2. India is the world's fourth largest refiner of petroleum products, with installed refining capacity exceeding its domestic consumption.
  3. India sources its entire crude oil import requirement exclusively from West Asian countries.
  4. A significant share of India's crude oil, gas and fertilizer imports passes through the Strait of Hormuz, where shipping has become challenging since the conflict began.
  • A. 1 and 2 only
  • B. 2, 3 and 4
  • C. 1, 2 and 4
  • D. 1 and 4 only

Q10. In the parliamentary procedure relating to Demands for Grants, what is the precise meaning of a 'Token Cut' motion?

  • A. A motion that 'the amount of the Demand be reduced to Re. 1', signifying disapproval of the policy underlying the Demand
  • B. A motion that 'the amount of the Demand be reduced by a specified amount', representing the economy that can be effected in the proposed expenditure
  • C. A motion that 'the amount of the Demand be reduced by Rs. 100', to ventilate a specific grievance within the sphere of the Government's responsibility
  • D. A motion to refer the Demand back to the concerned Departmentally Related Standing Committee for re-examination before it is put to vote

Q11. With reference to Article 113 of the Constitution of India and the procedure for Demands for Grants, which of the statements given below are NOT correct?

  1. Demands for Grants relate to estimates of expenditure 'charged' upon the Consolidated Fund of India.
  2. A Demand for a Grant can be made only on the recommendation of the President of India.
  3. The Rajya Sabha enjoys a concurrent power to vote on Demands for Grants, though it cannot reject them.
  4. Demands for Grants that remain undiscussed on the last allotted day are 'guillotined' and put to vote together.
  • A. 1 and 3
  • B. 2 and 4
  • C. 1, 2 and 4
  • D. 3 only

Q12. As per the Civil Aviation Requirements (CAR) issued by the DGCA, an applicant qualifies as a 'Scheduled Commuter Operator (Small)' only if the maximum all-up weight of each aircraft in its fleet does not exceed which one of the following?

  • A. 2,250 kg
  • B. 5,700 kg
  • C. 15,000 kg
  • D. 40,000 kg

Q13. With reference to the distinction between a 'Scheduled Indian Airline' and a 'Non-Scheduled Operator' (NSOP) under Indian civil aviation regulation, consider the following statements: 1. A Scheduled operator is required to operate according to a published timetable, whereas a Non-Scheduled Operator is not permitted to publish a timetable open to use by the general public. 2. While Non-Scheduled Operator Permits are issued by the Ministry of Civil Aviation, Scheduled Operator Permits are issued directly by the Department of Expenditure under the Ministry of Finance. 3. The Price Stabilization Fund towards Aviation Turbine Fuel pricing approved by the Union Cabinet is available to Scheduled Indian Airlines, not to Non-Scheduled Operators. Which of the statements given above is/are correct?

  1. A Scheduled operator is required to operate according to a published timetable, whereas a Non-Scheduled Operator is not permitted to publish a timetable open to use by the general public.
  2. While Non-Scheduled Operator Permits are issued by the Ministry of Civil Aviation, Scheduled Operator Permits are issued directly by the Department of Expenditure under the Ministry of Finance.
  3. The Price Stabilization Fund towards Aviation Turbine Fuel pricing approved by the Union Cabinet is available to Scheduled Indian Airlines, not to Non-Scheduled Operators.
  • A. 1 only
  • B. 1 and 3 only
  • C. 2 and 3 only
  • D. 1, 2 and 3

Q14. Under the Price Stabilization Fund for Scheduled Indian Airlines towards ATF pricing approved by the Union Cabinet in June 2026, the interest-free advance to Oil Marketing Companies is provided exclusively through the Demands for Grants of which one of the following Ministries/Departments?

  • A. Ministry of Civil Aviation
  • B. Department of Consumer Affairs, Ministry of Consumer Affairs, Food and Public Distribution
  • C. Ministry of Petroleum and Natural Gas
  • D. Department of Economic Affairs, Ministry of Finance

Q15. With reference to the Price Stabilization Fund (PSF) for Scheduled Indian Airlines towards ATF pricing approved in 2026 vis-à-vis the earlier PSF for perishable agri-horticultural commodities, consider the following statements:

  1. The original Price Stabilisation Fund for perishables was set up in 2004-05 as a Central Sector Scheme under the Department of Agriculture, Cooperation & Farmers Welfare before being transferred to the Department of Consumer Affairs.
  2. The 2026 PSF for Scheduled Indian Airlines provides one-time budgetary support of up to ₹10,000 crore as interest-free advance to Oil Marketing Companies and is the first PSF-type instrument extended to a transport fuel in India.
  3. Unlike the earlier PSF, which used a 50:50 Centre-State revolving fund model, the 2026 scheme is operated entirely through the Demands for Grants of the Ministry of Petroleum and Natural Gas with recoveries credited to the Consolidated Fund of India.
  • A. 1 and 2 only
  • B. 2 and 3 only
  • C. 1 and 3 only
  • D. 1, 2 and 3