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Agricultural Subsidies MCQ — 2 Practice Questions with Answers

Practice 2 Agricultural Subsidies multiple-choice questions with detailed answers and explanations. Ideal for RAS/RPSC exam preparation.

2 Questions Economy

Practice Questions

Q1. With reference to the Nutrient Based Subsidy (NBS) rates for Kharif 2026 approved by the Union Cabinet, which of the following is correct?

A The scheme covers only nitrogen-based urea and excludes all phosphatic and potassic fertilizers.
B The subsidy is paid directly to farmers through DBT before the sale of any fertilizer.
C The approved outgo is about Rs 41,533.81 crore and covers 28 grades of phosphatic and potassic fertilizers from 1 April to 30 September 2026. Correct
D The scheme replaces the MSP regime for all food grains and is implemented by the Ministry of Agriculture.

Explanation

The Cabinet approved approximately Rs 41,533.81 crore for Kharif 2026 NBS covering 28 grades of P&K fertilizers (DAP, MAP, MOP, TSP, SSP, complex and fortified variants) valid 1 April to 30 September 2026. The scheme does not replace MSP and is administered by the Department of Fertilizers, Ministry of Chemicals & Fertilizers. Subsidy is paid to manufacturers/importers through DBT after authenticated point of sale, not to farmers before sale.

Q2. Which of the following statements about the Nutrient Based Subsidy (NBS) scheme in India is INCORRECT?

A NBS subsidy rates for Kharif 2026 have been revised upward by around 12 per cent compared to Kharif 2025.
B Subsidy is fixed on a per kilogram basis for each major nutrient such as N, P, K and S.
C The Department of Fertilizers has been operating the NBS scheme for P&K fertilizers since April 2010.
D Urea, which is a nitrogenous fertilizer, is also brought under the NBS scheme from Kharif 2026. Correct

Explanation

Urea is NOT under the NBS scheme. Urea is subsidised under a separate administered price mechanism by the Government of India and sold at a statutorily notified MRP. The NBS scheme launched in April 2010 covers only Phosphatic and Potassic (P&K) fertilizers such as DAP, MOP, complex and fortified grades. The Kharif 2026 revision raised the budgetary outgo to about Rs 41,534 crore (roughly 12 per cent higher than Kharif 2025) with subsidy fixed on per-kg basis for each nutrient.

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