UPSC Essentials | Mains answer practice — GS 3 : Questions on India’s ethanol-blending and 2025 Sveriges Riksbank Prize (Week 125)

QUESTION 1

India’s ethanol-blending push has shifted feedstock from sugarcane to grains such as maize and rice. Discuss the economic and agricultural implications of this shift.

QUESTION 2

The 2025 Sveriges Riksbank Prize in Economic Sciences was awarded for contributions explaining innovation-driven economic growth. Discuss the contributions of Joel Mokyr, Philippe Aghion, and Peter Howitt.

General points on the structure of the answers for UPSC Mains

Introduction

— The introduction of the answer is essential and should be restricted to 3-5 lines. Remember, a one-liner is not a standard introduction.

— It may consist of basic information by giving some definitions from the trusted source and authentic facts.

Body

— It is the central part of the answer and one should understand the demand of the question to provide rich content.

— The answer must be preferably written as a mix of points and short paragraphs rather than using long paragraphs or just points.

— Using facts from authentic government sources makes your answer more comprehensive. Analysis is important based on the demand of the question, but do not over analyse.

QUESTION 1: India’s ethanol-blending push has shifted feedstock from sugarcane to grains such as maize and rice. Discuss the economic and agricultural implications of this shift.

Note: This is not a model answer. It only provides you with thought process which you may incorporate into the answers.

Introduction:

— The programme for blending of ethanol in petrol was initiated primarily to help sugar mills make timely payments to farmers, by creating an additional revenue stream from the processing of cane.

— Till 2017-18, mills produced ethanol only from so-called C-heavy molasses, the final dark brown liquid byproduct of cane processing containing sucrose that cannot be further economically recovered and crystalised into sugar.

— From the 2018-19 supply year, mills began making ethanol from an earlier ‘B-heavy’ stage molasses (having higher sucrose content available for fermentation) and also directly from whole cane juice or syrup. They were encouraged to do so by the government’s decision to pay mills more for ethanol produced from the B-heavy and direct cane juice/syrup routes, in order to compensate them for the revenues foregone from reduced/ nil recovery and sale of sugar.

Body:

You may incorporate some of the following points in your answer:

— Ethanol production basically involves fermentation of sugar by yeasts. In molasses or cane juice, sugar is present in the form of sucrose. Grains contain starch, a complex carbohydrate that has to first be extracted and broken down into simple sugars before further fermentation, distillation and dehydration to ethanol with 99.9% alcohol concentration.

— The incentives for ethanol production from grains led to not only sugar mills using these as an alternative, off-season feedstock — in no time, exclusively grain-based ethanol distilleries came up in states such as Punjab, Haryana, Bihar, Andhra Pradesh, Madhya Pradesh, Maharashtra, Karnataka, Rajasthan and Chhattisgarh.

— The grains were largely maize and rice. That included surplus and broken/damaged grain sourced from the Food Corporation of India (FCI) as well as the open market.

— There are two reasons why cereal grains have become the mainstay of the ethanol blended petrol programme rather than its originally targeted beneficiary, sugar.

(i) Drought-induced poor sugarcane crops in 2023-24 and 2024-25. The Modi government responded by limiting the use of B-heavy molasses and cane juice/syrup for making ethanol.

(ii) Differential pricing: For the 2024-25 supply year, the ex-distillery price of ethanol produced from maize was fixed at Rs 71.86 per litre.

Conclusion:

— From a policy perspective, the problems are two-fold. The first is the excess capacity. At last count, there were some 499 distilleries in India that had invested roughly Rs 40,000 crore in building an annual ethanol production capacity of 1,822 crore litres. And there are limits to how much more ethanol blending in petrol is technically feasible.

— The second relates to the familiar “fuel versus food and feed” debate. The ethanol blending programme has certainly given a boost to maize growers, by creating a new market for the grain consumed mostly as a poultry and livestock feed ingredient.

(Source: How grain, not sugar, is fuelling India’s ethanol production)

Points to Ponder

Read more about food vs. fuel

Read more about ethanol

Related Previous Year Questions

What is wetland? Explain the Ramsar concept of ‘wise use’ in the context of wetland conservation. Cite two examples of Ramsar sites from India. (2018)

Do you think India will meet 50 percent of its energy needs from renewable energy by 2030? Justify your answer. How will the shift of subsidies from fossil fuels to renewables help achieve the above objective? Explain. (2022)

QUESTION 2: The 2025 Sveriges Riksbank Prize in Economic Sciences was awarded for contributions explaining innovation-driven economic growth. Discuss the contributions of Joel Mokyr, Philippe Aghion, and Peter Howitt.

(www.nobelprize.org)

Note: This is not a model answer. It only provides you with thought process which you may incorporate into the answers.

Introduction:

— The Royal Swedish Academy of Sciences awarded the “Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel 2025” — popularly called the Nobel prize for economics — to Joel Mokyr (Northwestern University, US), Philippe Aghion (Collège de France, INSEAD, and LSE) and Peter Howitt (Brown University, US) “for having explained innovation-driven economic growth”.

— Mokyr, an economic historian, has received the Nobel for his work that was grounded in using historical sources to uncover the causes of sustained economic growth in the world. Whereas, Aghion & Howitt have been recognised for their mathematical model, which instead of looking into the past, analysed how individual decisions and conflicting interests at the level of firms can lead to steady economic growth at the national level.

Body:

You may incorporate some of the following points in your answer:

Mokyr’s contribution

— These days there is hardly a debate, political or otherwise, that does not reference a country’s economic growth. A fast GDP growth rate is considered to be a necessary ingredient for anyone to justify being in power or for any argument to carry weight. Countries such as China and India have grown at more than 7% for decades now, pulling millions out of abject poverty.

— Mokyr showed that prior to the Industrial Revolution, technological innovation was primarily based on “prescriptive” knowledge. That is, people often knew “how” things worked but they did not have the answer to “why” things worked (which is the part Mokyr calls “propositional” knowledge).

— According to Mokyr, scientists began to insist upon precise measurement methods, controlled experiments, and that results should be reproducible. This led to the “how” and “why” queries getting answered to produce “useful” knowledge.

Aghion & Howitt’s contribution

— Aghion & Howitt tackled the same question or phenomenon — how technological advancement leads to sustained growth — but their approach was very different. Instead of looking back into the past, they studied the modern economy and found that under the calm waters of stable economic growth at the national level, lay a lot of upheaval at the firm level.

— Through a mathematical model (framework) presented in the shape of a paper in 1992, Aghion & Howitt showed how this kind of creative destruction, while looking massively upsetting at the level of an individual company, could lay the foundations for stable macroeconomic growth.

— Here’s a brief: Imagine an economy where the rules are such that companies with the best technology can take out patents on their products. The protection from patents can create a monopoly that creates profits and pays for the production costs. However, a patent offers protection from competition, but not from another company making a new patentable innovation. This creates an incentive for others to compete and out-innovate in bid to create monopolies and profits.

(Source: Nobel Prize in Economic Sciences 2025: How the winners explained economic growth becoming the new normal)

Points to Ponder

Read about other Nobel Prizes

Read about the Sveriges Riksbank Prize in Economic Sciences

Related Previous Year Question

Distinguish between ‘care economy’ and ‘monetized economy’. How can care economy be brought into monetized economy through women empowerment? (2023)

Previous Mains Answer Practice

UPSC Essentials: Mains answer practice — GS 3 (Week 124)

UPSC Essentials: Mains answer practice — GS 3 (Week 123)

UPSC Essentials: Mains answer practice — GS 2 (Week 124)

UPSC Essentials: Mains answer practice — GS 2 (Week 123)

UPSC Essentials: Mains answer practice — GS 1 (Week 123)

UPSC Essentials: Mains answer practice — GS 1 (Week 122)

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