New Delhi: Government on Saturday approved the Fertiliser Ministry's proposal to provide Rs 14,500-crore subsidy to the cash starved fertiliser industry via a special banking arrangement (SBA) route.
"Cabinet Committee on Economic Affairs today approved ex post facto the implementation of the special banking arrangement (SBA) for Rs 14,500 crore for outstanding claims on account of fertilizer subsidy in the year 2013-14," an official statement said.
The loan together with government interest amounting to Rs 169.33 crore has been repaid from budget estimates for 2014-15, within the sanctioned budget under the Vote on Account, the statement added.
The previous United Progressive Alliance (UPA) government budgeted Rs 70,586 crore as fertilizer subsidy in fiscal 2013-14, but had to roll over Rs 30,000 crore of that to 2014-15.
"In order to meet carried over subsidy liabilities and help fertilizer companies overcome their liquidity problems, due to delay in payment of subsidy, an SBA had been made during 2013-14 with a consortium of nationalized banks to avail loans with the approval of Ministry of Finance," it said.
Government pays subsidy on Urea which is a decontrolled fertiliser and pays fixed subsidy on 22 grades of phosphatic and potassic (P&K) fertilizer available to farmers.
