Why were fertilizer subsidies a double-edged policy instrument during 1960–1990?

Correct — C. NCERT's Class XI text, under 'The Debate Over Subsidies', sets out both edges.

For: subsidies were needed as an incentive to adopt HYV technology, by small farmers in particular, and helped output rise.
Against: a substantial part of the fertiliser subsidy went to the fertiliser industry, and among farmers it largely benefited those in more prosperous regions.

Productivity on one side, skewed benefit on the other: option (c).

Why the others are wrong

• (a)
  They promoted global trade — Fertiliser subsidies were a domestic farm-input policy meant to grow more food at home. NCERT's debate is about who gains and the fiscal cost, not about trade.
• (b)
  They reduced rural employment — Nothing in the subsidy debate is about cutting rural jobs. NCERT's criticism is about who captures the benefit and the burden on government finances.
• (d)
  They discouraged use of HYV seeds — The reverse is true: NCERT says subsidies were needed as an incentive to adopt HYV technology, whose seeds depend on fertiliser and pesticide.

The Green Revolution was the large rise in foodgrain output from HYV seeds, especially of wheat and rice. NCERT stresses that these seeds needed fertiliser and pesticide in correct quantities, and a regular water supply.

So that small farmers could afford those inputs, the government gave them loans at low interest and subsidised fertiliser. That is the productivity edge.

The other edge, per NCERT, is that the subsidy also fed the fertiliser industry, flowed mostly to farmers in prosperous regions, and was a huge burden on government finances.

Key facts

• NCERT dates the first phase of the Green Revolution from about the mid-1960s to the mid-1970s, and the second from the mid-1970s to the mid-1980s.
• In the first phase, HYV seeds were used mainly in more affluent states such as Punjab, Andhra Pradesh and Tamil Nadu, chiefly for wheat.
• HYV seeds needed fertiliser, pesticide and a regular water supply.
• NCERT's Box 2.6 reports the economists' criticism that fertiliser and pesticide subsidies lead to overuse of resources that can harm the environment.

Common traps

• Choosing (d) by assuming subsidies pushed farmers away from new seeds: they were meant to pull farmers towards HYV technology.
• Reading double-edged as good or bad for the economy as a whole: the two edges here are higher productivity and uneven benefit.

No directly related past PYQ was found.