FinMin approves Rs 5500cr as SBA to pay fertiliser subsidy
The Finance Ministry has given approval after the letter was written by the DoF, seeking Rs 12,000 crore under SBA to address the liquidity crisis affecting the industry, as the domestic urea subsidy funds have been exhausted.
September 27, 2013 / 08:34 IST
Finance ministry has agreed for Rs 5,500 crore against Rs 12,000 crore sought by the Department of Fertilisers under a special banking arrangement (SBA) to pay part of the subsidy bill to the industry which is facing a liquidity crunch.
"We have got approval of Rs 5,500 crore under the SBA as of now and we have taken up the matter for remaining amount with the finance ministry," a senior official in the Fertiliser Ministry told PTI.Also Read: Expect healthy sowing for rabi season in FY14, says CoromandelThe Finance Ministry has given approval after the letter was written by the DoF, seeking Rs 12,000 crore under SBA to address the liquidity crisis affecting the industry, as the domestic urea subsidy funds have been exhausted. It is believed that the total requirement of funds is about Rs 30,000 crore which the department might seek under supplementary grant.Of this about Rs 12,000 crore is immediately required. In December, the Ministry had sent a proposal to the Finance Ministry seeking to draw SBA loan of Rs 25,000 crore from banks for subsidy payments. The government has marginally reduced the fertiliser subsidy to Rs 65,971.50 crore for the 2013-14 fiscal from the revised estimate of Rs 65,974 crore in 2012-13.Of this, the government will provide Rs 15,544.44 crore for imported urea, Rs 21,000 crore for indigenous (urea) fertilisers, and Rs 29,426.86 crore for decontrolled fertilisers (DAP, MOP and complexes) for supplying the inputs to farmers at a subsidised rate.Meanwhile, on behalf of the industry, the Fertiliser Association of India has filed a petition in the Delhi High Court seeking 14.75 per cent interest on the delayed subsidy payments. According to sources, other than for the imported urea,
subsidy funds under all other heads (indigenous urea and on sale of decontrolled fertilisers) have been exhausted or is about to be exhausted. Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
