ALSO READExcise exemption on PoS device manufacturing till March'17 Demonetisation: Tripura CM declines to be in PM Modi's panel Rumours of anti-demonetisation strike baseless: Government Govt sets up panels to follow through demonetisation move S&P affirms PFC's long-term credit rating with stable outlook
The government today promised to clear fertiliser subsidy arrears, estimated at about Rs 40,000 crore by March next, at the earliest and also increase the fixed cost of urea in order to strengthen the industry.
With banks flushed with money after demonetisation of Rs 500 and Rs 1,000 notes, Fertiliser Minister Ananth Kumar said the government was looking at providing loans to the industry at a reasonable rate through special banking arrangement.
"During our tenure, we want to make subsidy backlog zero... It (subsidy arrears) has become a huge burden," Kumar said while addressing the annual seminar of Fertiliser Association of India (FAI).
"Regarding the subsidy backlog, every year I am addressing this issue. We are pursuing the Finance Minister. This time we have opportunity. After the demonetisation of Rs 500-1000 notes, definitely the coffers of the banks are full. This can be utilised and invested in various forms including the bulk loans at very reasonable rate for the benefit of the industry including fertiliser industry," he said.
Highlighting steps taken by the government like 100 per cent neem-coating of urea and gas pooling to transform the industry, Kumar said the government's priority was to clear the subsidy backlog at the earliest.
Kumar said that he would definitely take up this matter with the finance ministry and see that his ministry gets the share of the benefits that have accrued with improvement in fiscal situation following demonestisation.
According to FAI Director General Satish Chander "subsidy arrears are estimated to fall slightly this year to around Rs 40,000 crore. At the end of last fiscal, the arrear was Rs 43,000 crore".
Fertiliser manufacturers have to incur an additional interest cost of Rs 4,000 crore per annum due to delay in subsidy payment by the government.
The government had allocated around Rs 70,000 crore in this year's budget for payment of fertiliser subsidy and the same has already been exhausted.
On the FAI's demand that the government implement its decision to raise the urea fixed cost by Rs 350/tonne, Kumar assured that this important aspect would be addressed soon.
He also said that the government would look at rationalising the tax structure on imports of various raw materials like rock phosphate.
The minister said that the government would take up all the issues of the industry one by one and try to resolve them.
Minister of State for Chemicals and Fertilisers Mansukh L Mandaviya asked the industry to educate farmers about the balance fertilisation taking help from soil heath cards.
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)