UPSC Prelims 2020 · Question 54 of 100
UPSC Prelims 2020 question on Fertilizer Pricing Subsidy
- ExamUPSC CSE
- Year2020
- PaperGeneral Studies Paper I
- SubjectIndian Economy
- TopicAgriculture Economy
- DifficultyHard
- TypeStatement
With reference to chemical fertilizers in India, consider the following statements:
1. At present, the retail price of chemical fertilizers is market-driven and not administered by the Government.
2. Ammonia, which is an input of urea, is produced from natural gas.
3. Sulphur, which is a raw material for phosphoric acid fertilizer, is a by-product of oil refineries.
Which of the statements given above is/are correct?
Show answer
Answer: B. 2 and 3 only
Verdict
Correct statements: 2 and 3 → Option (b).
Statement by statement
Statement 1 – INCORRECT: The Government of India subsidizes fertilizers to ensure that fertilizers are easily available to farmers and the county remains self-sufficient in agriculture. As per the New Urea Policy of 2015, the government fixes the market price of urea. Also, there is a fixed subsidy component. The retail price of chemical fertilizers is NOT market-driven — it is administered by the Government. Hence statement 1 is not correct.
Statement 2 – CORRECT: Fertilizer production uses 1.2% of the world's total energy, out of which 90% is used for ammonia production, which is a key ingredient in the production of nitrogen fertilizers. Ammonia can be produced from natural gas. Hence statement 2 is correct.
Statement 3 – CORRECT: Sulphur is a major by-product of oil refining and gas processing. Most crude oil grades contain some sulfur, most of which must be removed during the refining process to meet strict sulfur content limits in refined products. Sulphur is used in phosphoric acid fertilizer (There is a process known as 'The Wet Process' for producing the same). Hence statement 3 is correct.