UPSC Prelims Practice Questions — Govt. rejects ‘no takers’ charge for coal gasification scheme

Q1. The Scheme for Promotion of Surface Coal/Lignite Gasification Projects, carrying a financial outlay of ₹37,500 crore, was approved by which authority and when?

  • A. The Cabinet Committee on Economic Affairs, in January 2024
  • B. The Union Cabinet chaired by the Prime Minister, in January 2024
  • C. The Union Cabinet chaired by the Prime Minister, in May 2026
  • D. The Cabinet Committee on Economic Affairs, in June 2026

Q2. Which of the following correctly states the body that operationalises the ₹37,500-crore surface coal/lignite gasification scheme and the route by which projects receive the incentive under it?

  • A. The Ministry of Coal, which allots the incentive on a first-come-first-served basis to eligible applicants meeting the notified capex threshold
  • B. The Ministry of Coal, which selects projects through a transparent competitive bidding process benchmarking project cost, coal input and syngas output
  • C. The Ministry of Petroleum and Natural Gas, which selects projects through competitive bidding benchmarking project cost and downstream product output
  • D. The Department of Fertilizers, which sanctions the incentive to projects on the recommendation of the Ministry of Coal after techno-economic appraisal

Q3. Under the ₹8,500-crore Scheme for Promotion of Coal/Lignite Gasification Projects, which category carried the largest budgetary provision, and on what terms?

  • A. Category I — Government PSUs, ₹4,050 crore, with a grant of ₹1,350 crore or 15% of capex, whichever is lower
  • B. Category II — private sector as well as Government PSUs, ₹3,850 crore, with a grant of ₹1,000 crore or 15% of capex, whichever is lower
  • C. Category III — demonstration and small-scale plants, ₹600 crore, with a grant of ₹100 crore or 15% of capex, whichever is lower
  • D. Category II — private sector alone, ₹4,050 crore, with a grant of ₹1,350 crore or 20% of capex, whichever is lower

Q4. Which body issued the Letters of Award to applicants selected under the ₹8,500-crore financial incentive scheme for coal gasification, and in how many instalments was the grant under that scheme payable?

  • A. The Ministry of Mines, with the grant payable in two equal instalments
  • B. The Ministry of Power, with the grant payable in four equal instalments linked to milestones
  • C. The Ministry of Coal, with the grant payable in four equal instalments linked to milestones
  • D. The Ministry of Coal, with the grant payable in two equal instalments

Q5. The Ministry of Coal has stated that about 22.6 MTPA of coal gasification capacity is operational or under implementation, of which roughly 12 MTPA is accounted for entirely by projects sanctioned under the ₹8,500-crore financial incentive scheme. How many such projects are there?

  • A. Three projects
  • B. Five projects
  • C. Eight projects
  • D. Twelve projects

Q6. Talcher Fertilisers Limited, one of the entities associated with India's coal gasification programme, is best described as:

  • A. A wholly owned subsidiary of Coal India Limited formed to revive closed urea units through coal gasification and supply them captive coal
  • B. A joint venture of GAIL, RCF, Coal India Limited and FCIL set up to revive a closed fertiliser unit with a coal-gasification-based urea plant in Odisha
  • C. A joint venture of NTPC and RCF set up to produce urea and ammonia from imported natural gas at a greenfield complex in Odisha
  • D. A public sector undertaking under the Department of Fertilizers producing urea from a blend of naphtha and imported ammonia at Angul

Q7. Coal gasification, as promoted under India's clean coal technology effort, is best described as which one of the following?

  • A. A thermo-chemical process converting coal into synthesis gas made up mainly of carbon monoxide and hydrogen
  • B. The combustion of pulverised coal in supercritical boilers so that the entire carbon content is converted to usable heat
  • C. The complete removal of ash and sulphur from coal by washing before it is despatched to consuming industries
  • D. The direct conversion of coal into liquid hydrocarbons by hydrogenation, without any intermediate gaseous stage whatsoever

Q8. Under India's commercial coal mining regime, which of the following correctly states the fiscal concession available to a coal block allocatee for coal used in gasification?

  • A. A rebate of 50% in revenue share on coal used for gasification, provided at least 50% of the block's total coal production is gasified
  • B. A rebate of 25% in revenue share on coal used for gasification, provided at least 10% of the block's total coal production is gasified
  • C. A complete waiver of revenue share on coal used for gasification, provided the block concerned is classified as an underground mine
  • D. A rebate of 50% in revenue share on coal used for gasification, provided at least 10% of the block's total coal production is gasified

Q9. Urea manufactured through coal gasification — an import-substitution priority cited for the gasification schemes — is sold at a government-notified price, the resulting subsidy being borne by which one of the following?

  • A. The Ministry of Coal, which also administers the gasification incentive schemes and long-term coal linkages
  • B. The Department of Agriculture and Farmers' Welfare under the Ministry of Agriculture and Farmers' Welfare
  • C. The Department of Fertilizers under the Ministry of Chemicals and Fertilizers
  • D. The Department of Chemicals and Petrochemicals under the Ministry of Chemicals and Fertilizers

Q10. Among the import-dependence figures cited by the Government while justifying the surface coal/lignite gasification scheme, which one of the following product–share pairs is correctly stated?

  • A. Urea — about 50% imported
  • B. Ammonia — about 20% imported
  • C. LNG — about 100% imported
  • D. Methanol — about 80–90% imported

Q11. Consider the following features attributed to the ₹37,500-crore Scheme for Promotion of Surface Coal/Lignite Gasification Projects: 1. The financial incentive is capped at a maximum of 20% of the cost of plant and machinery. 2. The incentive for any single project is capped at ₹5,000 crore. 3. Applicants are selected on a first-come-first-served basis from submissions received on the online portal. 4. The incentive is released to the selected entity in two equal instalments. Which of the above is/are NOT correct?

  1. The financial incentive is capped at a maximum of 20% of the cost of plant and machinery.
  2. The incentive for any single project is capped at ₹5,000 crore.
  3. Applicants are selected on a first-come-first-served basis from submissions received on the online portal.
  4. The incentive is released to the selected entity in two equal instalments.
  • A. 1 and 3
  • B. 3 and 4
  • C. 2, 3 and 4
  • D. 4 only

Q12. Which one of the following correctly states India's headline national target for coal gasification?

  • A. Gasification of 100 million tonnes of coal by 2030
  • B. Gasification of 75 million tonnes of coal and lignite by 2030
  • C. Gasification of the entire incremental coal production above one billion tonnes by 2030
  • D. Gasification of 100 million tonnes of coal by 2027, advanced from an earlier 2030 deadline