The Cabinet Committee on Economic Affairs on October 18, 2014 approved ex post facto the implementation of the Special Banking Arrangement (SBA) for Rs 14,500 crore for outstanding claims on account of fertiliser subsidy in the year 2013-14.
Government is making fertilisers namely urea and 22 grades of phosphatic and potassic (P&K) fertiliser available to farmers at subsidised prices through fertiliser manufacturers/importers. Subsidy to fertiliser companies is paid from funds allocated under regular budget estimates for each year.
In order to meet carried over subsidy liabilities and help fertiliser companies overcome their liquidity problems, due to delay in payment of subsidy, an SBA had been made during 2013-14 with a consortium of nationalised banks to avail loans with the approval of the Ministry of Finance. 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.
Government is making fertilisers namely urea and 22 grades of phosphatic and potassic (P&K) fertiliser available to farmers at subsidised prices through fertiliser manufacturers/importers. Subsidy to fertiliser companies is paid from funds allocated under regular budget estimates for each year.
In order to meet carried over subsidy liabilities and help fertiliser companies overcome their liquidity problems, due to delay in payment of subsidy, an SBA had been made during 2013-14 with a consortium of nationalised banks to avail loans with the approval of the Ministry of Finance. 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.